During Sherwood's discussion (and in the BD+C editorial), someone in the room raised the notion that larger firms are competing with smaller firms for projects and using their larger size and experience to win work that was going to smaller firms. If you play this scenario out over time, what happens? The larger firms will add to their backlog and look busy, but those new projects don't bring in enough revenue to keep the lights on, desks filled and doors open, and generate adequate profits. This brings about layoffs, office shrinkage and possibly firms going out of business, or at the very least, a merger with or sale to another megafirm. Meanwhile, in smaller firms, those projects that fit their smaller overhead structure stop coming in. That means the few people working for these small firms have nothing to do and the firm owner has little choice but to either close his doors or sell to the larger firm that is stealing their lunch.
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