Whither interaction design consulting firms?

Is interaction design done by consultants or employees?

When Cooper was launched as an interaction design consulting firm in 1992, the answer to this question wasn't at all clear. However, as the 90s drew to a close, I confidently predicted that the bulk of the interaction design done in the world would be done by consultants. I based this conclusion on the proliferation and success of interaction design consulting firms. I assumed that the industry would follow the model of building architecture, where major design projects are typically performed by outside consultants. Architects on corporate staff would act primarily as liaison and project management. And for the first few years of the 21st century my prediction appeared correct. Today, I wonder if I called it wrong.

More and more I see corporations both large and small with their own in-house interaction design staffers. In fact, in a broad sense, my company competes with our own clients for qualified designers. There are still many successful interaction design consulting firms, but I see an ever increasing number of design projects handled completely by internal design talent, and successfully at that.

This, of course, brings up the thoughtful question of "Whither interaction design consulting firms?" What will their role be in the next decade? Will the pendulum swing the other way, and clients find that it is less expensive to hire designers on a project-only basis instead of keeping them on staff full time? Or will the consultants find themselves working only on fringe projects that are too large, too small, too complex, or too unique?

I don't yet know the answer to these questions, but I'm leaning towards the idea of an ever-more specialized role for interaction design consultancies. What do you think?