While bigger companies/group has its own M&A/DD team, small companies tend to just gather their own staffs to do all the necessaries and sometimes do not engage 3rd party consultants, despite having deeper knowledge of the industry, can in-house people perform a better or equivalent job as an 3rd party consultant where its expertise is on acquisition and not on the industry?
I believe each case is individual and requires a balanced solution. It depends on the size of the deal, on expertise (strategic vs. financial buyer), and the readiness of the team to perform the DD. The helping method is to develop a checklist with all the criteria and comprehensively assess the situation.
Since this is the DD forum I am responding in the context of completing DD (vs. executing an acquisition in its totality). I think the answer is highly dependent on the skills and experience of the inhouse team. If you have experienced/strong legal support (legal must have transaction/M&A expertise) and strong finance support (who is also knowledgeable about transactions) then you may very well be able to run the DD process successfully without a 3rd party. I think it also depends on if you are the target or the acquirer. As the target you are more in a responsive/production mode and in that instance a 3rd party is likely not needed to guide a target through the DD specific process.