Summary: AI is not making consulting irrelevant, but it is dismantling many of the structural advantages that allowed large firms to dominate for decades. The firms that adapt fastest to specialist-led, AI-enabled delivery models will shape the next era of the industry.
AI Is Not Killing Consulting. It Is Rewriting Its Operating Model
“AI was beginning to erode the advantages that had protected the major players for decades.”
That line from the Financial Times article captures the real shift happening in consulting right now.
Not collapse.
Not extinction.
Structural rewiring.
For decades, consulting was built around scale. The largest firms won because they could deploy armies of analysts, operate across multiple geographies, and staff projects quickly through highly leveraged pyramid structures. More people meant more delivery capacity. More delivery capacity meant more revenue.
AI is starting to break that equation.
A specialist team of 20 people, supported by AI systems and automation, can now deliver work that previously required layers of managers, analysts, PMOs, and offshore support teams. That does not remove the need for consultants. It changes where the value sits.
The industry is moving from labour scale to expertise scale.
The Rise Of The Specialist Firm
One of the most important themes emerging from this shift is the growing advantage of specialist firms.
Historically, large consulting firms recruited highly capable generalists and trained them across industries and functions. Analytical horsepower was often more valuable than deep operational expertise. That model worked because clients needed large teams to process information, structure problems, and create delivery capacity.
Generative AI now handles large parts of that workflow.
Research synthesis, first-pass analysis, presentation drafting, data summarisation, and operational modelling are increasingly automated. The differentiator is no longer access to general knowledge. AI already provides that at scale.
The differentiator becomes judgment.
Specifically, specialist judgment.
The firms likely to outperform in this environment are those with deep domain expertise, operator credibility, and highly contextual understanding of industries, functions, and transformation environments. AI still requires direction, framing, and interpretation. The consultant steering the system matters more than the system itself.
That creates opportunities for boutiques and spin-outs.
The Management Consultancy Association estimates that smaller firms are already seeing growth rates of up to 50 per cent as AI helps them compete more effectively against larger rivals. That is not simply a technology story. It is a structural market story.
AI has lowered the barrier to entry into consulting.
The Economics Are Starting To Shift
The implications extend far beyond delivery.
Consulting economics themselves are starting to change.
For decades, the industry relied on billable hours and leveraged staffing models. Large numbers of junior consultants generated utilisation and margin for a smaller number of senior leaders at the top of the pyramid.
But when AI compresses delivery timelines dramatically, charging purely for time becomes harder to defend.
Clients increasingly want pricing linked to outcomes, implementation, and measurable value creation.
That shift is already visible:
- performance-based consulting models
- subscription advisory structures
- embedded AI delivery services
- leaner expert-led teams
- recurring transformation retainers
In many ways, the operating logic of software and technology firms is beginning to embed itself inside consulting.
This is one reason McKinsey redesigning elements of its partner compensation model matters so much. The economics underneath consulting are changing, not just the tooling used to deliver projects.
The firms that adapt fastest to new pricing structures may gain significant advantage over competitors still tied heavily to utilisation-based thinking.
The Middle Of The Market Looks Most Exposed
Ironically, the firms under the greatest pressure may not be the global giants.
The largest firms still possess enormous advantages:
- brand credibility
- executive relationships
- multidisciplinary capability
- global delivery infrastructure
- capital to invest aggressively in AI
At the other end of the market, boutiques benefit from speed, specialisation, and lower operating complexity.
The firms caught in the middle may struggle most.
Mid-tier consultancies often lack both the investment capacity of the global firms and the agility of specialist challengers. As AI compresses delivery work and clients demand sharper expertise, being “broadly capable” may become a weaker positioning strategy.
This becomes especially important in talent markets.
Senior talent increasingly wants autonomy, faster decision-making, specialist positioning, and more direct exposure to value creation. Large firms are aware of this risk. Retaining high-performing partners and directors becomes harder when smaller firms can now scale faster without building huge organisational structures first.
The battle for talent may become just as important as the battle for clients.
The Incumbents Should Not Be Underestimated
There is a tendency online to assume that AI-native firms will rapidly dismantle the incumbents.
That feels simplistic.
These firms are too large, too embedded inside major enterprises, and too well-capitalised to become irrelevant quickly. The industry has already survived major structural shifts including offshoring, digital transformation, cloud computing, and the rise of Indian delivery firms.
Large consultancies adapt.
And when they do move, they move with enormous force.
The challenge is that AI is developing faster than most prior industry shifts. Bureaucracy, governance structures, and internal politics slow down transformation inside large partnerships. Smaller firms can often experiment and deploy new models much faster.
For now, the speedboats are quicker.
But once the tanker turns, the competitive landscape could change again very rapidly.
The deeper question is not whether consulting survives AI.
It is which operating models survive it.
Ben Appleton is the founder of Strat-Bridge, a specialist executive search partner to the strategy consulting industry. He works with global consulting firms and senior leaders across the UK, Germany, Switzerland, and beyond — helping them build capability at the Partner and Director level.
