BCG's CEO admits its biggest AI projects now get paid on results, not hours.

Christoph Schweizer told the press the firm's largest AI engagements are moving to fees tied to what clients achieve, as AI erodes the billable hour.

BCG's chief executive, Christoph Schweizer, said in late-May press coverage what strategy house leaders have mostly avoided saying out loud: the billable hour is losing to AI, and the firm's biggest AI projects are already being paid for differently. Rather than charging by the hour for a team of consultants, BCG is tying the fee on its largest AI engagements to what the client actually achieves. Schweizer did not frame this as a threat. He framed it as the business, noting that most companies are struggling to get value out of their AI spending and that closing that gap is precisely what BCG sells.

The numbers behind the shift are large enough to explain the candor. BCG has told reporters it expected AI work to make up roughly 20 percent of its revenue in 2024 and to reach around 40 percent by 2026. When nearly half your revenue depends on a kind of work a client can partly automate in seconds, charging for the hours a junior consultant spends aggregating data stops being defensible. McKinsey's Kate Smaje, appearing in the same coverage, put the industry on notice in plainer terms, saying many of the fundamentals of the professional services model are now under challenge.

Executives should read the difference between what is being conceded and what is not. Outcome-based pricing, as BCG describes it, means the fee moves with the result: the firm earns more when the client wins. That is a real change from time and materials, but it is softer than it sounds. The firm keeps the upside and rarely commits to absorbing a loss when the result falls short. It is a step toward paying for outcomes, not a promise to stand behind them. The direction, though, is unmistakable, and it is the same direction rivals are quietly moving.

The reason this matters beyond consulting gossip is timing. Two of the most prestigious names in the business admitted, in the same window and the same press, that the model which built their industry is repricing. The firms that move first to a fee tied to a result the client can verify will set the terms of the next contract cycle. The firms still defending the hour will be repriced by the ones that shipped a number they were willing to be measured against.