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  "description": "Billable hours are becoming less useful as a yardstick. McKinsey's clients are demanding outcome-based fees. The same pressure is coming for communicators – sooner than many expect.",
  "path": "/when-mckinsey-cant-justify-the-hours-what-does-that-mean-for-the-rest-of-us/",
  "publishedAt": "2026-05-26T06:22:11.000Z",
  "site": "https://www.nevillehobson.io",
  "tags": [
    "FIR 515: Agents Everywhere",
    "How AI is forcing McKinsey and its peers to rethink pricing",
    "You can't beat AI.",
    "Your Value Is Not Your Timesheet",
    "AI and the End of Billable Hours",
    "Behnam Norouzi for Unsplash+"
  ],
  "textContent": "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.\n\nMcKinsey, 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.\n\nThe 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.\n\nThis is not a niche debate about consulting firm economics. It's a signal about where the entire model of charging for advice is heading.\n\n## **I've written about this before**\n\nThis connects directly to things I've been thinking and writing about for a while now.\n\nIn 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.\n\nIn 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.\n\nThe McKinsey story suggests that argument is moving from the theoretical to the inevitable.\n\n## **What Ruben Hassid adds to this**\n\nEarlier 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.\n\nHis 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.\n\nNobody 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.\n\nThat's the value that remains distinctly human. And it's the value that outcome-based pricing is designed to reflect.\n\n## **The question this leaves open**\n\nThe 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.\n\nBut 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.\n\nThe 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.\n\nThe question for communicators is whether they're having that conversation with their clients before the clients raise it first.\n\n* * *\n\n**Sources:**\n\n  * FIR 515: Agents Everywhere (_For Immediate Release_ , 25 May 2026)\n  * How AI is forcing McKinsey and its peers to rethink pricing (_Financial Times_ , 25 May 2026)\n  * You can't beat AI. (Ruben Hassid, 20 May 2026)\n  * Your Value Is Not Your Timesheet (Neville Hobson for _Strategic_ , 1 December 2025)\n  * AI and the End of Billable Hours (Studio6, 28 February 2025)\n\n\n\nPhoto at top by Behnam Norouzi for Unsplash+.",
  "title": "When McKinsey can't justify the hours, what does that mean for the rest of us?",
  "updatedAt": "2026-05-26T06:22:11.509Z"
}