Consulting firms now face clients demanding automatic 10% fee reductions when artificial intelligence is used in delivery, cutting both time and staff requirements. Pressure on fees exposes how AI is breaking the old “time and motion” model, where firms billed by hours and headcount rather than outcomes.
Projects that once needed large teams over a year can now finish in months with far fewer advisers on the ground. Consulting firms now have to defend why fees should stay high when visible production costs are falling.
To protect profitability, PwC promotes a shift towards “value-based” billing and argues clients should pay for results, not inputs. The firm points to the rising cost of generative AI tools, data infrastructure and workforce training as justification for preserving margins.
That narrative asks clients to fund the AI investment in return for better, faster work. Boutique firm Revium warns that clients may resist paying “full freight” once they understand how much cheaper delivery has become.
The emerging tension centres on who captures the financial upside of AI, the consulting firm or the client. Large global consultancies may hold firm on premium pricing in the near term, helped by brand strength and complex high-stakes mandates.
Smaller advisers look more exposed if procurement teams normalise AI-linked discounts across categories. The early move to lock 10% savings into contracts signals that buyers now treat AI efficiencies as a baseline expectation, not an optional bonus.
