Artificial intelligence is disrupting the consulting industry by challenging traditional billing structures and the established graduate recruitment model. Svilena Tzekova, KPMG's London-based global head of consulting, said that the intellectual property and knowledge once used to form the basis of consulting work is becoming increasingly accessible, leading to higher client expectations. Tzekova told CNBC that the portion of the business involving providing advice for significant profit is becoming nonexistent as clients can now access that level of advice very quickly.
While clients increasingly express a desire to pay for outcomes, procurement departments often continue to compare consultancies based on hourly rates and the number of people assigned to a project, Tzekova said. Firms must also account for new costs in their pricing models, such as computing power and fees from AI providers based on text processing volume. Tzekova noted that arriving at a commercially sensible outcome-based pricing model remains difficult and will take time.
Smaller, AI-native consultancies may hold a competitive advantage over the Big Four firms—Deloitte, PwC, EY, and KPMG—due to their agility and different billing structures. Emiko Caerlewy-Smith, head of investor relations at London-based challenger consultancy Elixirr, said the firm has never billed clients on a time-and-materials basis. Caerlewy-Smith argued that clients should focus on fixed deliverables and value rather than the time required to create inputs, noting that smaller firms can adopt AI internally much faster than enormous organizations.
The rise of automation also threatens the industry's traditional graduate pipeline. Entry-level tasks such as research, data analysis, and presentation production can now be largely automated, which may impact how junior employees develop necessary skills. Claire Trachet, founder of London-based advisory firm Trachet, said that while AI helps junior employees work faster, it creates a challenge for gaining the experience required for professional progression.
Trachet argued that professional judgment is a craft built through experience and noted that "the ones who will stand out later will be the ones who own that for themselves."
