McKinsey Moved First. We're Next.

The billable hour wasn't killed by offshoring. It survived the cloud. But something is different now.

McKinsey just tied 25% of its global fees to outcomes. And 67% of consulting buyers say they prefer fixed-fee over time-and-materials, up from 41% three years ago. That's not a trend. That's a verdict.

I've been in consulting long enough to watch the industry protect its billing model through every disruption cycle. The argument was always the same: complexity is hard to price in advance, clients value flexibility, T&M protects both sides. There was truth in it. But what AI does isn't compress complexity. It compresses time. Weeks of analyst work become hours. When that happens, the billable hour shows its seams.

The numbers that caught my attention aren't the McKinsey headline. It's the bifurcation underneath it. Firms growing at 11-12% right now are implementation-led and outcomes-priced. The ones stuck at 5.7% are still selling advisory hours. That gap is going to widen, not close. AI accelerates the production of the thing that T&M used to obscure, which is how much time the work actually requires when you're really good at it.

I don't think this kills consulting; quite the opposite. I think it forces the industry to own its outcomes, rather than its hours. That's a harder conversation to have with clients (and honestly can be harder to get right). It requires more conviction about the value you're delivering. More clarity about client expectations. It's a lot of different dials we've historically had to manage. But it's also what separates the firms that will matter in five years from those that will shrink.