Deloitte told its own consultants that AI will erode the hours-based billing model that has underpinned professional services for decades, with AI agents expected to dominate the market by 2035. The shift is forcing major consulting firms to abandon hourly billing in favor of fixed-price or outcome-based contracts, a move that carries real financial risks—overruns eat into profits, cash flow turns unpredictable, and disputes over success metrics threaten client relationships.
Summaries like this, in your inbox every morning.
Sign up free →What happened
At an internal town hall, Deloitte leaders presented a chart projecting that hours-based consulting work will shrink to a small fraction of the market by 2035, while AI agents—still in early stages—will grow exponentially and make up the majority of the professional services market. Consultants expressed frustration, with one telling the Wall Street Journal the firm is "basically getting replaced by robots."
Why it matters
The consulting industry's traditional model of billing clients by the hour is under existential pressure. Firms like McKinsey and Boston Consulting Group are already shifting toward fixed-price or outcome-based pricing, but the transition creates real risks: projects that run over budget hurt margins, cash flow becomes unpredictable, and disputes over success metrics can damage client relationships. Pat Petitti, CEO of AI consulting platform Catalant, calls this an "existential scramble" for new revenue models because "AI is destroying their business model."
What to watch
McKinsey reports that more than 30 percent of its global fees already come from outcome-based pricing models, signaling how far the industry's largest players are willing to go. Deloitte stated it is making "significant investments to lead this human-led, AI-powered shift for our industry," suggesting the race to adapt is already underway.
No comments yet. Be the first to share your thoughts!
Log in to join the discussion
Get curated AI news from 200+ sources delivered daily to your inbox. Free to use.
Get Started FreeFree · takes 30 seconds · unsubscribe anytime
1 minute a day. The AI essentials.
200+ sources · Email / LINE / Slack
