AI Is Reshaping How Consultancies Bill and Who They Hire

Artificial intelligence is putting pressure on two pillars of the consulting trade: the fees firms charge and the large graduate intakes that have long staffed projects, according to CNBC Technology. Svilena Tzekova, who leads consulting worldwide for KPMG from London, told the network that the sector is in transition.

Knowledge and intellectual property that consultancies once sold as their core product are now far easier for clients to reach, Tzekova said. As a result, customers expect more. She told CNBC that advice which used to take days or months to produce can now be obtained quickly by almost anyone, and that the revenue once generated from handing over recommendations has largely disappeared.

Firms have not settled on a replacement for the old billing model. Tzekova said clients say they want to pay for results, yet their procurement teams still judge consultancies by headcount and hourly rates. She added that AI brings fresh costs into pricing, such as computing power and charges from AI providers tied to how much text their models process, on top of staff costs. Tzekova described reaching a workable outcome-based price as very difficult, and said the industry will need time to find the answer.

Smaller firms built around AI see an opening while the Big Four, meaning Deloitte, PwC, EY and KPMG, work to update their operations. Emiko Caerlewy-Smith, who handles investor relations at London challenger Elixirr, told CNBC that her firm has never charged on a time-and-materials basis. She said clients should pay for agreed deliverables and value rather than for hours spent producing inputs, and that AI is intensifying an approach the firm already took.

Caerlewy-Smith said customers now want partners to build things with them instead of only offering guidance. She cited a recent engagement in which the firm worked with a multinational insurance company on a motor cover platform powered by AI. She also pointed to internal adoption speed, saying Elixirr needed half a year to prepare its data for full use by its models, and asked how long that would take at an organisation with tens of thousands of staff.

The graduate route into consulting is under scrutiny too. The sector has typically taken on thousands of university leavers annually, starting them on research, data work and slide production, tasks that can now be automated in large part. Claire Trachet, a former Deutsche Bank M&A banker who founded London advisory firm Trachet, told CNBC that AI speeds up junior work but raised doubt over how newcomers gain the experience to advance without doing that groundwork.