Source: Financial Times
McKinsey, BCG, Bain, and Deloitte have historically maintained pricing power and client lock-in through scale—their ability to deploy 500-person teams on complex projects. AI agents that can handle analytical grunt work, code generation, and first-pass strategy documentation now enable 10-person boutique firms to deliver comparable output, directly compressing the labor economics that justified premium rates. The competitive threat isn't that AI makes consulting obsolete; it's that it reduces the resource intensity protecting incumbent margins, allowing smaller firms with stronger domain expertise and client relationships to undercut on price while maintaining quality.