(FORTUNE Magazine) – Chan Suh is CEO of a four-year-old Web consulting company in New York City called Agency.com. His office has an exposed brick wall, wood floors, doodads, and windows overlooking Greenwich Village. He works with a bunch of horn-rimmed creative types--average age, 29--who, with very little irony, say things like, "We think a lot about words here" and "I came here because I wanted to work someplace where people aren't afraid." Suh, 37, is addicted to e-mail and cigarettes. Two funky black-leather chairs at the headquarters, once fixtures in his office, have ashtrays built into their armrests.

Asked to talk about Agency.com, Suh launches into an amiable, if cryptic, riff comparing his firm to a kid in the midst of a massive growth spurt. "We are about to graduate," he says. "Our first year was infancy. Our second year was childhood--who do we want to play with? Our third year was high school. Last year we had our freshman, sophomore, and junior years in college. Now we're being kicked into the real world."

It's easy to snicker, but this is no parody of geek chic. Suh and his 650 employees devise and implement Web strategies for some 30 world-class companies--outfits like British Airways, Compaq, Kmart, Met Life Insurance, Sprint, and Texaco. A couple of years ago, Agency, as it's sometimes called, just made Web pages, at around $50,000 a pop. Now the company offers high-margin strategic consulting services on a long-term basis. It assesses clients' competition (traditional and Internet varieties), writes marketing plans, recommends software suppliers, produces return-on-investment forecasts. It can pull in as much as $30 million per project, commanding up to $500,000 just to produce an exploratory report. With the help of a big investment from Omnicom, an ad-agency holding group that now owns 40% of Agency, the still-private company has been on an acquisition binge, gobbling up six outfits in the past two years. It has offices in Boston, Chicago, London, Paris, San Francisco, and other cities. Its 1998 revenues were somewhere around $80 million.

And it's not alone. As huge corporations everywhere scramble for e-business advice, a host of new service firms is getting closer and closer to the people who are deciding how big business will deal with the Internet. To name a few: There's USWeb/CKS. There's Viant. There's Scient. There's Fort Point Partners, iXL, Proxicom, HomeCom. There's Modem Media.Poppe Tyson, Organic, and Razorfish (which come out of the advertising and marketing worlds); Cambridge Technology Partners, Diamond Technology Partners, Sapient, and Transaction Information Systems (which are hard-core systems integrators). In Europe there's Icon Media Lab and Nua.

It's hardly surprising that everyone and his dog wants a piece of the action; Hambrecht & Quist analyst Danny Rimer estimates that by 2005, businesses will fork over close to $50 billion a year for strategic Internet services. "Strategic Internet services" is Rimer's name for the sector; others call it "Internet professional services." Different people have dubbed the companies "i-builders," "interactive relationship managers," "transactive content integrators," and "systems innovators." Not that any of the names shed light on what the companies actually do. Says Clement Mok, the highly respected founder of San Francisco's Studio Archetype: "It's a very confusing time for someone looking for consultants." Mok's design firm is currently merging with Sapient in Cambridge, Mass. A Studio spokeswoman says the company will engage in "e-business transformation."

Anyway, these new players strive to be the McKinseys--or the Andersen Consultings--of the Net. They're the New Consultants, the e-consultants. Because they breathe, eat, and sleep Internet, they say, they're the only people companies can depend on for advice on e-business. "If I were one of those old strategy consultants, I might be thinking about another line of work," says Steve Ariana, a managing director at Scient, a 13-month-old firm in San Francisco.

Ariana--who, at age 48, is positively doddering by the standards of this crowd--used to work at Visa International and Schwab. At Scient he has consulted on numerous projects for financial services companies (a Scient specialty), including First Union. One rainy afternoon, he pauses to tell FORTUNE why exactly Scient is so much better than the Andersens et al.

We sit in a cluttered office; the conference room we had planned to use, a glassed-in affair with breathtaking views, is occupied by a couple of Scient strategists who are working with a client. They've stuck Post-it notes all over the glass walls, arranged in rows and squares and columns. The client is in the "Conceive Phase" of its project, a series of interviews and workshops to hammer out Internet goals. "We don't let them out of there until they're done," someone says ominously.

Ariana begins talking about a new financial services client code-named SnowBank. SnowBank's several Websites are in disarray. "They're having huge customer-service headaches," Ariana says.

Within days of getting the contract, Scient conducted more than a dozen interviews with top executives at SnowBank. Then came the Conceive Phase, Post-it notes and all. Six weeks later, Scient had pulled together what Ariana calls an "interim deliverable"--a general strategy road map that may result in happier SnowBank customers. During the next couple of months the companies will hammer out organizational and technological questions, and then Scient will build and deploy the project.

Scient prides itself on delivering advice quickly. "These days clients have more money than time. That's a fundamental change," Ariana says. "You don't have to be right when you get it done. Early is better than accurate."

That is a key philosophical difference between the old and the new. Unlike the McKinseys, e-consultants don't expect to work on a single project for years and years. On the Internet, you get your play up first--some kind of play, any kind of play--and then you "iterate," constantly updating and improving in a mad effort to stay competitive. Speed is the name of the game. Everyone's a believer.

Scient comes at all this from a technology perspective. New Consultants focused on design and marketing issues don't think as much about corporate operations, internal systems, or deployment. But their services are also strategic. Both Agency.com and Modem Media.Poppe Tyson work with Unilever, the $50-billion-a-year Anglo-Dutch consumer packaged-goods company. Agency is counseling Unilever on its food business--which includes Lipton tea, Ragu spaghetti sauce, Breyers ice cream, and five different kinds of margarine ("yellow fats," on the corporate Website). Modem advises on the company's home and personal-care products business--a range of brands including Pond's, Vaseline, and Elizabeth Arden, and Surf and All detergents.

For the most part, brand groups at Unilever make their own decisions about building Websites and designing Web advertising, just as they've always shepherded their identities on TV and in print. Agency and Modem advise the company at the corporate level, working with a group within Unilever called the Interactive Brand Center. "They give us ideas about how we can take our brands into the electronic realm," says Tony Romeo, the strategy vice president who heads the IBC. For example, for the Lipton Kitchens Recipe Secrets page, strategists at Agency.com suggested that Unilever allow Web surfers to chat with one another and make a file of their favorite recipes.

The projects don't sound like much. (That may be because businesses say they're reluctant to discuss the strongest ideas that come out of their consultations.) But at their best, the New Consultants ease clients smoothly into the world of electronic business, and do it in a way that inspires. These guys ooze earnest enthusiasm. "We drank the Kool-Aid early," says G.M. O'Connell, the 37-year-old founder and CEO of $43-million-a-year Modem Media in Westport, Conn. (In the late '80s, O'Connell worked on some of the first online experiments--including General Electric's GEnie and the Delphi online service.) Gushes Mark Kvamme, co-founder of interactive advertising agency CKS, now half of the $229-million-a-year USWeb/CKS: "We are fundamentally changing as a society--how we conduct business and how we communicate. I'm so fortunate to be where I am right now. It's a gas."

Scient CEO Bob Howe, 54, gets so animated, you wonder how he manages to breathe. "I was running a pretty big part of IBM," he says. (After 15 years at Booz Allen & Hamilton, Howe joined IBM in 1991 as CEO of its consulting division and left last year to join Scient.) "But I came here, because I became convinced electronic commerce and electronic business are going to change the world. I love starting things. I thought it would be great to be in a company that is dedicated to this. I really think this is going to be the greatest service firm in the history of business!"

At their worst, the New Consultants embody Internet chaos. They have quality-control problems that companies like Bain and Andersen, with their armies of Ivy League workhorses, refuse to tolerate. Employees who sign on with old-line consulting firms are prepared to slog through less-than-exciting work. But a lot of folks attracted to Net companies are in it because it's cool. For every smart, professional e-strategist at a New Consultant, there's at least one giddy, clueless one standing right behind him.

Scott Gilbertson, who heads the new-media group at J. Crew, gets calls from Internet consulting firms all the time. "A lot of companies still draw technology schematics when they come by," he complains. "I can't invest time in that kind of conversation." Gilbertson estimates that only 20% of consultants are prepared to discuss J. Crew's business when they call. "A couple of the biggest names in this space have nothing to say. They just press the flesh. There are all these young guys; it's kind of a Hollywood scene. It's like they expect you to be wowed. The appeal of that is going to wear off."

Accountability is a problem. Says Gilbertson: "I've had eight different meetings with 'the people who built barnesandnoble.com.' " A lot of companies make it sound as if they're handling everything for one client or another--when actually they've tackled a piece of a larger project. (Both Modem and iXL, a $60-million-a year outfit in Atlanta, told FORTUNE, for instance, that Delta Air Lines worked with them on an almost exclusive basis. The reality: Modem is the lead designer of Delta's site, while iXL--an acronym of sorts for "Internet excellence"--supplies technology for specific pieces of the Website.) And when more than one New Consultant gets involved in the mix, customers complain, they often play the blame game, pointing fingers at one another when anything goes wrong.

There are squishier cultural challenges. The New Consultants are having to get used to the demands presented by deals with big business--clients who spend more money demand more in return. "Before, our clients would be pleasantly surprised when we talked about their core businesses. They'd say, 'That's cute, look at those kids!' " says Chan Suh. "But now they expect us to think about more than just technology." Jonathan Nelson, the 31-year-old CEO of Organic in San Francisco, agrees. "We used to get special favors from the larger companies--they treated us like a pet project. I remember one of our clients, a big fast-food company. The senior guys would take me aside and explain the whole business to me. No one has that kind of patience today."

Also, the New Consultants' creative, business, and techie types--designers, strategists, and developers--are very, very different beasts. No one is sure how well they'll work together ultimately or who will be in charge. The problem is exacerbated at companies like USWeb/CKS and iXL, which have recently bought up a whole assortment of companies--43 for iXL, 42 for USWeb--to offer customers one-stop shopping. USWeb/CKS CEO Robert Shaw and iXL CEO Bert Ellis both insist that the diversity within their companies is an asset, and that integrating is no big deal. "Everyone thought this would be a huge challenge," says Shaw. "But it's gone without a hitch, as far as I can tell. This is a case of two plus two equals, hopefully, six."

Clement Mok, of newly combined Studio Archetype and Sapient, has his doubts. "Given the effort it has taken to integrate just two companies, I can't imagine what it's like for them." Eight months into Mok's deal, Studio Archetype and Sapient--both known as first-class firms--maintain separate offices, identities, and for the most part, client rosters. "I would love to have one appliance to do both my dishes and my laundry," comments O'Connell, who has kept Modem focused on marketing. "But I haven't seen anyone invent one yet."

So are these companies really any threat to Andersen Consulting ($8.3 billion in annual revenues), McKinsey (an estimated $2.5 billion), and Bain ($552 million)? The upstarts are hardly delving into business strategy writ large--and customers practically guffaw at the suggestion that they ever will. Take Unilever's Romeo: "The point of going to interactive specialists is that they're specialists. It would be unrealistic to expect them to be broad-based." Echoes Michael Dunn, manager of applications development for Ocean Spray, which works with USWeb/CKS: "We've never asked them for business planning. That wouldn't be a good fit." Most of the New Consultants make no bones about their limitations. "We're not here to tell GE how to run its business. We're here to develop a channel for GE, if it wants it," says Organic's Nelson.

What the New Consultants are doing is putting pressure on the traditional players, who can seem behind the times. "The management consultants don't get it yet," says British Airways' Julia Groves, an Agency.com customer. An Organic consultant is less polite. "Those guys don't know a damn thing about the Net," he says. "They pull things out of their asses. We see their reports and we think, 'You can't implement that. It won't fly.' "

The traditional consultants admit they're Net-challenged but insist that the New Consultants won't be able to fend them off forever. "It's just because McKinsey and Booz Allen aren't off their butts yet," says Chris Dallas-Feeney, vice president of Booz Allen's e-commerce group. "Those Internet guys are filling a void right now, but the void will disappear."

Outfits like Booz Allen are investing a lot of money getting Internet practices up to speed. They're even warming to the culture. "We've got to be relevant to today's MBAs," says David Pecaut, who runs the e-commerce practice for the Boston Consulting Group. BCG's solution? Let new recruits work with startups. "That usually quenches their thirst," Pecaut cracks.

BCG is also giving young employees more access to clients' upper echelons. "I've got 25- and 26-year-olds working with CEOs," Pecaut says. "More staid, traditional firms have trouble with this. The 50-year-old partners look at the kids and say, 'What do you know?' Well, they happen to know a lot. They may not have the business experience, but they've got a lot of technology savvy."

When people talk of the future of the New Consultants, they envision firms consolidating, specializing, tossing off splashy IPOs (in the past 18 months, USWeb and Modem have gone public; iXL has filed preliminary papers for its IPO; and rumor has it that Agency.com and Scient will file soon). What's forgotten in the excitement is that the very thing that helped these guys get successful--the confusion out there about the Net--may disappear. And when companies have a better sense of how to win in the virtual world, who's to say they won't return to the warm embrace of their consultants of old?

Of all the Old Consultants, the name that seems to come up most is Andersen Consulting. Andersen's spiel these days is all about e-commerce, and it's not the type of company to simply cede its market to neophytes. It's well versed in both strategy and implementation, and has relationships with A-list customers that any New Consultant would envy. It takes the Internet seriously. Says Rudy Puryear, global managing partner for

e-commerce: "We believe 30% to 40% of our business has e-commerce content. Within three to five years, we think that will go up to 100%. This is our business." Guys like Puryear are even trying their hand at New Economy jargon. "In the 21st century, e-enterprises will do e-commerce against the backdrop of the e-economy," he says. Yikes.

What's certain is this: With all the e-ing going on, FORTUNE 500 companies will continue spending on Web strategies that appear, dazzle, fail, "iterate." New Consultants will rake in some of that dough and will keep gobbling up the coolest office space in America--bringing with them their attitudes, their fluttering Post-its, and their funky black-leather ashtray-chairs. "We're all going to win," says Organic's Nelson, who keeps a staff of carpenters on payroll to work on his company's loft space.

But what's the game, really? Is this crowd strictly minor league, or are some of them headed for the majors? "We're not a sector yet, and the jury is still out on whether we'll ever be," says Chan Suh, in a moment of self-doubt. He paces around his office, tossing a small rubber ball. "We're poised on the verge of something very deep. Or very shallow."