The Consultants' Conundrum: Should McKinsey Bet Big on AI?
The consulting world is facing its biggest shake-up in decades. It's a shift so seismic that even the industry's titans are considering their positions.
McKinsey & Company, the blue-chip consultancy that has been advising Fortune 500 CEOs for nearly a century, is one such firm.
The team at McKinsey are confronting an uncomfortable truth in 2025, one signed, sealed and delivered by AI.
The problem? AI can deliver the same polished PowerPoint presentations and data analyses that once justified eye-watering fees — and it can do so in minutes, not months.
Executives from the 'Big Four' and beyond are concerned that AI is quickly making traditional consulting — a sector estimated to be worth nearly US$1tn globally — obsolete.
McKinsey has chosen to react radically, however, transforming itself from the inside to stay ahead of the changes.
When the hunter becomes the hunted
"Do I think that this is existential for our profession? Yes, I do," admits Kate Smaje, the Senior Partner leading McKinsey's AI transformation.
Her candour reflects the gravity of the situation.
For decades, McKinsey's cohorts of consultants have commanded premium rates as a result of their ability to synthesise complex information and craft strategic roadmaps for corporate leaders.
Nowadays, however, AI can do all these things far faster and cheaper than even the brightest university graduates.
This change is already being reflected in the numbers: recently McKinsey has trimmed its workforce from 45,000 to 40,000 employees while at the same time it has deployed approximately 12,000 AI agents across its operations.
McKinsey's Global Managing Partner, Bob Sternfels, sees this as a natural evolution for the company, culminating in a future where the firm operates with one AI agent for every human employee — a radical reimagining of the consulting model.
“We’re going to continue to hire, but we’re also going to continue to build agents,” he says.
The new McKinsey machine
McKinsey's AI arsenal now touches every aspect of its operations.
The firm's consultants are now using bots that can:
- Build comprehensive PowerPoint presentations in minutes
- Take detailed notes during client meetings
- Summarise lengthy research documents and interviews
- Write in McKinsey's signature "sharp, concise and clear" tone
- Verify the logical flow of complex arguments
Right now, one of the most popular AI tools amongst McKinsey's consultants is the one that helps them crack the firm's distinctive communication style, while another acts as a digital fact-checker, ensuring consultants' reasoning holds water.
These tools are starting to fundamentally change the way that McKinsey delivers its services to clients.
Project teams that once required 14 consultants can now operate with just two or three, with the support of AI agents and deep research models.
Beyond the PowerPoint paradigm
The transformation extends far beyond internal efficiency gains. McKinsey has recognised that clients no longer want "a suit with PowerPoint", as Nick Studer, CEO of Oliver Wyman puts it.
The market is demanding hands-on implementation, not just strategic advice. The firm has pivoted accordingly, with AI and technology consulting now representing 40% of its revenue.
About a quarter of McKinsey's work now operates under outcomes-based arrangements, where payment depends on achieving specific results rather than billable hours.
This is a shift that reflects a broader industry evolution where consulting firms must prove their worth through tangible outcomes, not just elegant presentations.
The human premium
Despite all the furore surrounding the firm's adoption of AI, Bob insists McKinsey will continue to hire consultants "aggressively".
The key lies in understanding what humans can offer that AI cannot.
"You can get to a pretty good, average answer using the technology now," Kate explains.
"So the kind of basic layer of mediocre expertise goes away. But the distinctive expertise becomes even more valuable."
Senior partners with decades of experience are set to become more indispensable, not less, because they've encountered similar challenges before and can navigate complex human dynamics that AI struggles to understand.
McKinsey will now look to prioritise candidates that are fast learners, good collaborators and excellent communicators — qualities that remain uniquely human.
The future of consulting
So, is McKinsey's bet on AI a high-stakes experiment, or a well calculated early adoption? Either way, the entire consulting industry is watching closely.
As AI capabilities expand, traditional consulting models built on large teams of junior analysts become increasingly untenable.
The firm is betting that by embracing AI rather than resisting it, McKinsey can maintain its position at the top of the consulting hierarchy.
Success requires more than just deploying new technology — it demands a complete reimagining of how value is created and delivered in the professional services world.
For a firm celebrating its centenary next year, the future is coming fast. Will the sector follow suit?
