AI is coming for consulting’s billable hours — and its graduate pipeline

Artificial intelligence is challenging the building blocks of the consulting industry, from the fees firms charge clients to the armies of graduates who have traditionally powered its business model. 

Svilena Tzekova, KPMG's London-based global head of consulting, agreed that the industry is changing. The intellectual property and knowledge that once formed the basis of consulting work are becoming increasingly accessible, she said, so clients have higher expectations than ever before.

We were making quite a lot of money by providing advice. I think that part of our business is literally nonexistent anymore

Svilena Tzekova

KPMG

"Anyone can go and very quickly get to the level of advice that we used to deliver within whatever days or months at times," Tzekova told CNBC. "We were making quite a lot of money by providing advice. I think that part of our business is literally nonexistent anymore."

Pricing models

But the industry has yet to work out exactly how to charge for this new kind of work. Although clients increasingly say they want to pay for outcomes, their procurement departments still tend to compare consultancies on the number of people assigned to a project and their hourly rates, Tzekova said.

AI is also introducing new costs that firms need to factor into their pricing models, including computing power and the fees AI providers charge based on how much text their models process, alongside the traditional costs of employing people, she said.

"It's very difficult to be able to arrive at a commercially sensible outcome-based pricing model," Tzekova said. Largely, firms are still working out the equation, and that will take some time, she said.

AI-native consultancies

Smaller, AI-native consultancies hope to gain a competitive advantage as the likes of the Big Four — professional services giants Deloitte, PwC, EY and KPMG — race to modernize.

The KPMG offices stand in 15 Canada Square, Canary Wharf, London, England.

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