When McKinsey can't justify the hours, what does that mean for the rest of us?

Neville Hobson 26 May 2026 3 min read

A short piece in the Financial Times caught my attention. It's a Lex column – tightly argued, deliberately pointed – and it describes something that I think matters well beyond the world of management consulting.

McKinsey, the most blue-blooded of consultancies, is under pressure from clients to tie its fees to outcomes achieved – lower costs, higher profits, increased market share – rather than to the hours its consultants spend producing advice designed to achieve those ends.

The FT's conclusion is blunt: billable hours are becoming less useful as a yardstick, thanks in large part to consultants' own use of AI. And the pressure isn't unique to McKinsey. Lawyers, auditors, and other professional services firms are facing the same push from clients to pass on the efficiency gains that AI is delivering.

This is not a niche debate about consulting firm economics. It's a signal about where the entire model of charging for advice is heading.

I've written about this before

This connects directly to things I've been thinking and writing about for a while now.

In February last year, I wrote about AI and the end of billable hours, drawing on a conversation with Steve Rubel in an FIR Interview. The argument then was that AI was making the logic of billing by the hour increasingly fragile – not because clients were demanding change, but because the internal economics of time-based pricing were starting to break down.

In December, I developed that thinking further in a piece for Strategic magazine: your value is not your timesheet. The case there was more direct. AI has not killed the communication consultant. It has killed the logic of the billable hour. If your pricing is still tied to the clock, it is no longer telling the truth about your value.

The McKinsey story suggests that argument is moving from the theoretical to the inevitable.

What Ruben Hassid adds to this

Earlier this week, in episode 515 of the For Immediate Release podcast, Shel Holtz and I discussed a newsletter by Ruben Hassid of How to AI that makes a related point with striking directness.

His argument: AI is getting cheaper at a rate most people haven't absorbed. The cost of AI intelligence has fallen 6,000-fold in four years. The result is that your salary is now being compared to a subscription. And time spent no longer signals value the way it once did.

Nobody cares that it took you all weekend. The better argument, Hassid says, is: I understood the real problem. I knew what to ignore. I found the missing risk. I made the decision easier.

That's the value that remains distinctly human. And it's the value that outcome-based pricing is designed to reflect.

The question this leaves open

The FT notes one genuine complication with outcome-based pricing: results can be affected by forces beyond any consultant's control. Wars, tariffs, market shifts. That's a real limitation, and it's why billable hours, subscriptions and flat fees won't disappear entirely. The FT's own conclusion is that the proportion of outcome-based pricing will expand – not that it will replace everything else.

But for communication consultants, that nuance doesn't change the underlying challenge. Clients are already asking harder questions about what they're paying for. AI is making those questions more pointed. And the fact that McKinsey – with all its brand authority and pricing power – is responding to this pressure suggests that no professional services firm is insulated from it.

The conversation about how to price judgement, counsel, and outcomes rather than hours is no longer a future consideration. It's happening now, at the highest levels of the profession.

The question for communicators is whether they're having that conversation with their clients before the clients raise it first.

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