Yes, that's what I assume the logic is as well. But the things you find in contracts when you have them reviewed include novel new ways for you to be sued; for instance: standard IP language can be read in ways that impute ownership of your technical methodologies to your clients, and IP claims survive transfers between companies.
Another common clause is non-competition, which is binding between companies even in California. And, yes, you could just tear down the company and boot up a new one in order to deliver work for a client's competitor, but the risk/reward equation is reversed in that situation: your consulting firm is more likely to drop a client than to endure a lawsuit.
Another common clause is non-competition, which is binding between companies even in California. And, yes, you could just tear down the company and boot up a new one in order to deliver work for a client's competitor, but the risk/reward equation is reversed in that situation: your consulting firm is more likely to drop a client than to endure a lawsuit.