You moved off the billable hour. If you’re still selling undefined work, you only renamed the discount.

The scramble off the billable hour is real and nearly universal. The Wall Street Journal reported consulting and accounting firms moving away from hourly billing, with a Deloitte town hall reportedly showing traditional hourly work shrinking toward a sliver of the market within a decade. The near-universal response is to change the pricing label, hourly to fixed fee, fixed fee to outcome-based, while selling the same undefined advisory work underneath.

Relabeling does not escape the squeeze. It renames it. Outcome pricing bolted onto advisory that was never productized is still a discount, because the buyer still cannot tell what they are paying for. When AI compresses the analysis, and McKinsey’s internal tool now redirects roughly $12 million a month of consultant capacity away from research, a loosely scoped fixed fee just locks in a lower number for the same fuzzy deliverable. The firm took on the risk of AI’s speed and handed the savings to the client.

The firms that actually escaped were not repricing. They were built differently. Newton Consulting has tied every fee to operational outcomes since 2001, measured in things like waste removed and costs cut, and its managing partner told the Journal it is “incredibly difficult to pivot toward this if this is not what your organization represents.” Pricing follows the offering. You cannot price an outcome you have not built the firm to deliver.

TSIA named the stakes for everyone still standing on the old base. Bo DiMuccio wrote that if a firm’s revenue still depends on hours or headcount, AI will keep eroding its margins. Changing the line item on the invoice does not change the base the revenue rests on. Only redefining what the firm sells does that, and the pricing model is the last step, not the first.