{"id":38794,"date":"2025-11-17T12:21:58","date_gmt":"2025-11-17T12:21:58","guid":{"rendered":"https:\/\/agooka.com\/news\/usa\/ai-is-reshaping-how-mckinsey-makes-money\/"},"modified":"2025-11-17T12:21:58","modified_gmt":"2025-11-17T12:21:58","slug":"ai-is-reshaping-how-mckinsey-makes-money","status":"publish","type":"post","link":"https:\/\/agooka.com\/news\/usa\/ai-is-reshaping-how-mckinsey-makes-money\/","title":{"rendered":"AI is reshaping how McKinsey makes money"},"content":{"rendered":"<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/6837079cca50259add4d29a6?format=jpeg\" alt=\"Mckinsey logo over a crowd of people\"\/><figcaption>McKinsey is &quot;really rethinking the nature of the work that we do,&quot; an executive told Business Insider.<\/p>\n<p>Davide Bonaldo\/SOPA Images\/LightRocket via Getty Images<\/p>\n<\/figcaption><\/figure>\n<ul>\n<li>AI is changing the nature of consulting work and the way firms charge for their services.<\/li>\n<li>Consulting giant McKinsey said that a quarter of its fees are now driven by outcomes-based pricing.<\/li>\n<li>Clients are increasingly looking for support on complex, multi-year projects, the consultancy said.<\/li>\n<\/ul>\n<p>McKinsey &amp; Company says AI is reshaping what it offers clients and how it charges them.<\/p>\n<p>&quot;We&#039;re doing more performance-based arrangements with our clients,&quot; Michael Birshan, managing partner of the UK, Ireland, and Israel at McKinsey, told reporters at a media event in London earlier in November.<\/p>\n<p>Consultants have traditionally billed clients based on a project&#039;s scope and duration, with a portion of their fees tied to the number of billable hours worked by the team.<\/p>\n<p>Now, rather than saying, &quot;Here&#039;s a scope, what&#039;s the fee for that?&quot; clients are coming to McKinsey and saying, &quot;Here&#039;s the outcome we&#039;d like to get to,&quot; and the fee will be mostly contingent on the performance McKinsey can deliver, Birshan said. Some fixed cost components remain.<\/p>\n<p>About a quarter of McKinsey&#039;s global fees come from this pricing model, he said.<\/p>\n<p>Outcomes-based pricing didn&#039;t start because of AI, but the type of work AI transformation demands suits it, Kate Smaje, global leader of technology and AI at McKinsey, told Business Insider in an interview.<\/p>\n<p>The shift in pricing developed over the past several years as McKinsey started doing more multi-year, multidisciplinary, transformation-based work for clients, though the proportion of 20% &quot;is probably more recent, the last few years,&quot; and they expect it to increase, she added.<\/p>\n<p>Clients who were undertaking &quot;big career bets&quot; appreciated the company saying, &#039;Hey, look, your scorecard with your board is our scorecard, and we&#039;re both successful when this transformation works, so let&#039;s share in the upside,&quot; said Smaje.<\/p>\n<p>Success is typically measured against a scorecard that includes factors such as investor targets, hitting revenue or profit goals within a set timeframe, operational measures, and customer satisfaction scores, she said.<\/p>\n<h2>&#039;Rethinking the nature of the work we do&#039;<\/h2>\n<p>AI is changing what clients want from consultants, and McKinsey is &quot;really rethinking the nature of the work that we do,&quot; Smaje told Business Insider.<\/p>\n<p>People may still think of consultants as delivering straight strategy advice, but that now makes up less than 20% of the company&#039;s work, she said. Instead, clients are turning to them for &quot;deep implementation expertise&quot; and multi-year transformation projects that require support across the business from data to workforce policies.<\/p>\n<p>&quot;We&#039;re not a supplier, we&#039;re not a vendor, we&#039;re a genuine partner,&quot; Smaje said.<\/p>\n<p>The changes unfolding at McKinsey reflect the broader shift across the consulting industry, as AI disrupts talent strategies, organizational structures, and business models at leading firms.<\/p>\n<p>Raj Sharma, EY&#039;s global managing partner for growth and innovation, told Business Insider in January that the power of AI agents is forcing his firm to reconsider its commercial model.<\/p>\n<p>Similar to McKinsey, instead of charging clients based on the hours and resources EY might spend on a project, Sharma said AI agents may call for a &quot;service-as-a-software&quot; approach where clients pay based on outcome.<\/p>\n<p>&quot;This is a moment where many of the fundamentals of the professional services model are coming under challenge,&quot; Smaje said in the media briefing. &quot;The fastest learners that are going to win in this space.&quot;<\/p>\n<p><em>Have a tip? Contact this reporter via email at <\/em><em>pthompson@businessinsider.com<\/em><em> or Signal at Polly_Thompson.89. Use a personal email address, a nonwork WiFi network, and a nonwork device; here&#039;s our guide to <\/em><a href=\"https:\/\/www.businessinsider.com\/insider-guide-to-securely-sharing-whistleblower-information-about-powerful-institutions-2021-10\" rel=\"noreferrer\" target=\"_blank\"><em>sharing information securely<\/em><\/a><em>.<\/em><\/p>\n<p>Read the original article on Business Insider<\/p>\n","protected":false},"excerpt":{"rendered":"<p>McKinsey is &quot;really rethinking the nature of the work that we do,&quot; an executive told Business Insider. Davide Bonaldo\/SOPA Images\/LightRocket via Getty Images AI is changing the nature of consulting work and the way firms charge for their services. Consulting giant McKinsey said that a quarter of its fees are now driven by outcomes-based pricing. 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