Deloitte has put a difficult message in front of its own consultants: the familiar model of selling expert time by the hour is facing serious pressure from AI. The warning came during an internal town hall that, according to a Wall Street Journal report, left some consultants frustrated about what the shift could mean for their work.
A chart pointed to a smaller role for hourly work
Jason Manstof, a leader in Deloitte's US public sector consulting division, showed a chart last month that projected how hours-based consulting work could decline through 2035. In that view of the market, the green bar representing the industry's core hourly work shrinks to a thin sliver of the total.
Manstof did not say the model disappears. But he framed it as only one part of a broader market by 2035, rather than the central engine it has long been for consulting firms.
"The not-so-great news is that type of work, even though still a significant part in 2035, will only be a part of the overall picture," Manstof said during the webcast, which the WSJ was able to review.
The source of the pressure is AI agents. The article says those agents are still in their early stages, but would grow exponentially and make up the majority of the expanding professional services market by 2035.
Consultants heard a threat to the model
The town hall landed sharply because it touched the basic economics of consulting. For many firms, the billable hour has been the cleanest way to price work: consultants spend time, clients pay for that time, and projects are managed around staffing and utilization.
AI changes that conversation. If more work can be handled through AI agents, clients may question why value should be measured mainly by human hours. That does not automatically remove consultants from the process, but it does weaken the old link between time spent and money earned.
One Deloitte consultant described the message to the WSJ in blunt terms:
"They heavily implied our model is toast. We're basically getting replaced by robots."
A Deloitte spokesperson gave a different framing, saying the company is making "significant investments to lead this human-led, AI-powered shift for our industry." That phrasing matters. Deloitte is not presenting the transition as a move away from people entirely, but as a shift in how people and AI are packaged into services.
Why replacing the billable hour is hard
The consulting industry is trying to become more like a software or product business. Instead of selling human labor by the hour, firms want to sell fixed-price subscriptions or flat-rate solutions.
That sounds cleaner for clients, but the source article makes clear that the transition is uneven. When a project takes longer than planned, the firm can end up absorbing the extra cost. Payments can become less predictable. Cash flow problems can appear. Client relationships can also suffer when success depends on subjective measures that are disputed after the work is done.
The risks are practical, not abstract:
- Longer projects can hurt margins when a flat price does not cover the extra work.
- Payments can become unpredictable when billing is no longer tied directly to time spent.
- Success metrics can create conflict if clients and consultants disagree about whether an outcome was achieved.
- Cash flow can become harder to manage as firms move away from familiar hourly billing cycles.
That is why the consulting billable hour remains difficult to abandon even when firms see pressure building. It is not only a pricing habit. It is a structure that shapes staffing, revenue, project planning, and client expectations.
Rivals are also moving toward new pricing
Deloitte is not alone in facing the issue. McKinsey and Boston Consulting Group are pushing harder toward outcome-based pricing models, according to the source article.
More than 30 percent of McKinsey's global fees already come from such models, according to senior partner Shelley Stewart III, the WSJ reports. That figure shows that outcome-based work is not just a future idea for the largest consulting firms. It is already part of the revenue mix.
Pat Petitti, CEO of AI consulting platform Catalant, described the situation as an "existential scramble" for new revenue models. His explanation was even more direct: "AI is destroying their business model."
The stakes for professional services
The debate at Deloitte points to a larger question for professional services: what exactly are clients buying when AI can perform more of the work? Under the old model, the answer was often time from trained consultants. Under the emerging model, firms want to sell packaged solutions, subscriptions, flat-rate work, or outcomes.
That shift could expand the professional services market while reducing the role of traditional hours-based work inside it. The source article's central point is not that consulting ends. It is that the industry's most familiar way of charging for consulting may become much less dominant by 2035.
For Deloitte's consultants, that message was uncomfortable because it came from inside the firm. For the industry, it is a signal that AI is now pressing on the business model itself, not just the tools consultants use to do their work.