TLDRs;
- AI efficiency is prompting clients to demand lower consulting fees, pushing PwC to reduce prices on some services.
- PwC’s move signals a shift away from time-based billing toward value-based pricing models.
- AI is dismantling consulting’s traditional pyramid structure, automating junior-level work.
- Firms like McKinsey are doubling down on AI tools, shifting their workforce toward higher-value tasks.
PwC has begun lowering prices on select services after artificial intelligence significantly improved its internal operations, a move that’s sending ripples across the global consulting industry.
The firm’s decision came amid rising client expectations that efficiency gains driven by AI should translate into cost savings on their end.
Dan Priest, PwC’s Chief AI Officer, acknowledged the growing pressure from clients who have become increasingly aware of how AI is streamlining consulting work.
“Clients would hear us talking about using AI and say, ‘We want our fair share of those efficiencies,’” Priest said, confirming that PwC has already passed on savings to some customers.
While the firm’s adjustments apply selectively, the impact reflects a broader reckoning underway across the consulting sector. As firms like PwC use AI to accelerate tasks that once required days of manual labor, clients are demanding not only faster results but also a fairer price.
Clients Drive a New Pricing Paradigm
PwC’s decision is part of a larger trend where AI adoption in consulting is prompting a rethink of traditional billing practices. For decades, firms relied on time-based pricing models, where armies of junior staff handled data collection, analysis, and presentation , work that now takes AI systems minutes to perform.
Efficiency gains are no longer a competitive advantage but a baseline expectation. Research shows that AI-driven tools are improving operational efficiency in consulting by as much as 35 percent.
As clients become more knowledgeable and empowered by their own use of AI, they’re less inclined to pay premium fees for tasks that can be automated.
Consulting’s Business Model Under Pressure
The price adjustments at PwC also spotlight the growing strain on the industry’s “pyramid” business model. Traditionally, consulting firms structure teams with a wide base of junior analysts who are billed out at high hourly rates. With automation now handling many of these tasks, the justification for time-based billing is weakening.
This evolution is pushing firms toward alternative revenue models, such as value-based pricing, where fees are tied to outcomes rather than hours worked. PwC has acknowledged that its initial price reductions have begun to plateau, shifting its focus to creating measurable value rather than simply doing the same work faster.
McKinsey and the AI Disruption Wave
Other industry leaders are undergoing similar transformations. McKinsey & Company, for instance, has deployed an internal AI assistant called Lilli, which now performs many duties once handled by junior analysts. Used by over 75 percent of McKinsey staff, Lilli drafts presentations, researches market trends, and synthesizes data with a speed and accuracy that’s hard to match.
Despite assurances that AI tools like Lilli are designed to enhance rather than replace human talent, hiring data suggests otherwise. Fewer junior roles are being created, and analysts are being pushed into more strategic positions as the machines take over routine functions.
Future of Consulting Hinges on Value Creation
The consulting industry is at an inflection point. Clients are no longer satisfied with insights alone. They want strategy, execution, and results. AI is forcing firms to redefine what they offer and how they price it.
“The biggest benefit for our clients is much more than price.” Priest noted.
PwC’s price cuts are not just a reflection of internal efficiency but a recognition that the value clients expect is shifting. As AI matures, the firms that thrive will be those that can harness its power not just to work faster, but to work smarter and deliver more meaningful outcomes.
