Will AI Accelerate the Path to Partner... Maybe, However Consulting is Changing Radically

The consulting industry is at a critical juncture. For decades, the hierarchical partnership model, with its well-defined career progression and significant financial rewards, has been the foundation of consulting firms. However, in 2024, generative AI (GenAI) emerged as a transformative force, challenging the traditional structure and forcing firms to rethink how they deliver value.

What was once a steady climb to partnership has now become a race against time—and technology. AI is not just a tool to streamline operations; it is fundamentally reshaping the consulting landscape, redefining client expectations, and altering the rules of the game.

2024 Was A Year of Disruption

The question is no longer whether AI will change consulting, but how firms and consultants can embrace this shift to thrive in an entirely new landscape.

The financial performance of leading consulting firms paints a stark picture of disruption:

• Partner pay dropped 5% at EY and PwC.

• Transaction revenue fell 13%.

• Consulting revenue declined by 4%.

• EY’s growth collapsed from a robust 16% to just 3%.

These numbers suggest more than a temporary slowdown; they signal a structural transformation that consulting has never seen before.

Yes, the industry has weathered waves of change before — spreadsheets, outsourcing, the internet, and automation. But this time, the disruption is fundamentally different. Why? Because AI doesn’t just streamline processes; it redefines what consultants do and how clients value their services.

The Collapse of the Pyramid Model

The traditional consulting model resembles a pyramid: a large base of junior consultants supports a smaller group of mid-level managers, topped by a narrow tier of highly compensated partners. This structure thrives on leverage—the ability to bill clients for large teams performing time-intensive tasks.

However, AI is dismantling this pyramid...

1. Junior Roles Are Disappearing

Generative AI tools can handle tasks like data analysis, report generation, and financial modeling—jobs that once required large teams of junior consultants. This eliminates the need for many entry-level roles, shrinking the base of the pyramid.

2. Premium Work Is Diminishing

AI is democratizing expertise. Tasks that once justified premium fees, such as strategic planning or market analysis, can now be performed faster and cheaper with AI. Clients are questioning the value of paying top dollar for work that technology can accomplish.

3. More Partners, Fewer Opportunities

As the base shrinks and premium work decreases, more partners are competing for fewer high-value engagements. This intensifies competition, puts downward pressure on fees, and erodes margins.

4. Fixed Costs Are Becoming Unsustainable

The traditional model relies on high fixed costs, such as large office spaces, extensive training programs, and partner salaries. With shrinking revenues and tighter client budgets, these costs are becoming harder to justify.

5. Client Expectations Are Shifting

Clients are investing in their own AI capabilities, reducing their reliance on external consultants for broad advice. They demand faster results, deeper expertise, and pricing models tied to outcomes rather than billable hours.

The Decline of Trust and Judgment

For decades, consulting firms relied on their reputation for “trust and judgment” to command premium fees. However, trust and judgment alone are no longer enough in a world where AI can generate insights, simulate scenarios, and predict outcomes with unprecedented accuracy. Clients now expect:

Outcome-Based Pricing

Firms must tie their fees to measurable results, such as cost savings, revenue growth, or improved efficiency.

Technology-Driven Solutions

Clients are shifting budgets from headcount-heavy consulting engagements to technology investments that deliver ongoing value.

Specialization Over Generalization

The demand for generic strategy advice is waning. Instead, clients want specialists with deep expertise in niche areas, such as AI integration, ESG (environmental, social, and governance) compliance, or supply chain optimization.

The New Career Reality: Path to Partnership Is Disappearing

For aspiring consultants, the traditional path to partnership is fading. The journey, once seen as a reliable route to financial and professional success, is now fraught with uncertainty.

Fewer Junior Roles

With AI automating entry-level tasks, firms are hiring fewer junior consultants. This reduces opportunities for career progression through traditional hierarchies.

Longer, Riskier Tracks

The shrinking pyramid means fewer partnership opportunities, longer timelines to promotion, and greater competition for the roles that remain.

Diminished Financial Rewards

Partner pay is declining as margins compress, making the financial incentives less compelling.

Reimagining Business Models: Disruption Vectors, Value, and Velocity

The future of consulting belongs to firms that embrace disruption, focus on value creation, identify the disruption vectors and operate with agility to deliver at velocity.

Traditional models must give way to approaches that prioritize:

1. Disruption at Scale

Firms must help clients transform their industries through bold, innovative strategies. This involves leveraging AI to identify new opportunities, mitigate risks, and redefine competitive advantage.

2. Value Vectors

Consulting engagements should focus on high-impact areas where firms can deliver measurable ROI. These include operational efficiency, revenue growth, customer experience enhancement, and sustainability.

3. Velocity

Clients no longer tolerate long project timelines. Firms must adopt agile methodologies, leveraging AI to accelerate delivery and iterate rapidly based on client feedback.

Key Strategies for Transformation

1. Leverage AI as a Core Capability

AI should be embedded in every aspect of a consulting firm’s operations, from internal processes to client-facing services.

Proprietary AI tools can

• Automate repetitive tasks, freeing consultants to focus on strategic work.

• Provide real-time insights and recommendations, enhancing decision-making.

• Enable clients to access self-service solutions for ongoing value.

Example: A firm could develop an AI platform that analyzes market data, identifies emerging trends, and suggests actionable strategies, reducing project timelines from weeks to days.

2. Adopt Value-Based Pricing

The billable-hour model is no longer sustainable. Firms must align their fees with the value they deliver, incentivizing both parties to achieve tangible outcomes.

Implementation framework

• Use success-based contracts tied to specific KPIs.

• Offer tiered pricing models based on the complexity and impact of the engagement.

Example: For a supply chain optimization project, a firm could charge a percentage of the client’s cost savings instead of hourly rates.

3. Specialize and Build Niche Expertise

Generalist consulting is becoming obsolete. Firms should focus on areas where they can offer unparalleled expertise, such as AI ethics, digital transformation, or regulatory compliance.

Example: A consulting firm specializing in AI ethics could help companies develop frameworks to ensure their AI systems align with ethical standards and avoid reputational risks.

4. Create Agile, Cross-Functional Teams

Clients value speed and collaboration. Agile, multidisciplinary teams can deliver faster results while addressing complex challenges.

Example: A team working on a digital transformation project might include AI engineers, UX designers, and change management consultants, working iteratively with the client.

5. Invest in Innovation Hubs

Innovation hubs can serve as incubators for new ideas, allowing firms to experiment with emerging technologies and co-create solutions with clients.

Example: An innovation hub focused on sustainability could develop AI-driven tools to help clients track and reduce their carbon footprint.

6. Foster Ecosystem Collaboration

Partnering with technology companies, startups, and academic institutions can help firms access cutting-edge innovations and deliver greater value to clients.

Example: Collaborating with a tech startup, a firm could co-develop a predictive maintenance solution for manufacturing clients.

Conclusion

Building the Consulting Firm of the Future

The consulting industry is at an inflection point. The rise of GenAI is not just another wave of technological change — it’s a paradigm shift that demands bold action and fundamental reinvention.

The consulting industry is undergoing a seismic shift. Traditional models are no longer sufficient to meet the demands of an AI-driven world. Firms that cling to legacy structures risk obsolescence, while those that embrace disruption, focus on delivering measurable value, and operate with agility will define the future.

For individuals, the message is clear: the path to success in consulting is no longer about waiting for a promotion. It’s about building your own future, seizing opportunities, and staying ahead of the curve in a rapidly changing landscape. The winners in this new era won’t just adapt to change—they’ll drive it.

The winners in this new era won’t just adapt to change — they’ll drive it. Will you?