PwC consulting overhaul reveals AI reckoning for the Big Four
The influx of AI is putting the Big Four’s structures under strain, and cracks are beginning to appear in their consultancy divisions, argues senior reporter Maria Ward-Brennan.
The industry is facing a storm of problems, including over-recruitment during the pandemic, low staff attrition rates due to economic issues, and a drop in fees as the impact of AI feeds through, prompting firms to rush to protect profitability.
The firms are making a flurry of layoffs to try to address their attrition problem. In consultancy, some are jumping before they are pushed, as over the last couple of years, there has been an influx of consultancy boutiques stacked up with ex-Big Four partners.
However, pushing headcount down and stopping is equivalent to sticking a plaster on a broken arm. More needs to be done to get ahead of the issue.
This week, it was revealed that PwC is drawing up a blueprint to standardise its consultancy services across its global business, following a fee decline in its consultancy division.
James Ransome, partner at Patrick Morgan, explained: “As AI compresses both the cost and time of delivery, the classic model starts to break down. Clients increasingly expect integrated, real-time answers rather than stitched-together outputs from multiple teams.”
Unlike other professional services firms, the Big Four, despite sharing the same name, operate as separate entities in each jurisdiction.
‘Merging divisions’ is not the hardest move
Catherine Anderson, director of delivery, Source Global Research, added that “Clients also want boots on the ground that understand the local market and culture as well as regional coverage that reflects the way their own businesses operate.”
“This is not always easy to do, and firms can differentiate themselves in the market if they are able to deliver this to clients in a way that is simple to access and use,” Anderson added.
Ransome also pointed out that “merging divisions is the visible move, but not the hardest one in my opinion.”
He noted that while merging service lines is easy, the real hurdle is overhauling incentives and governance to end internal competition. He warns that shifting from local to regional profit-and-loss often triggers “organ rejection” from senior partners who are losing their autonomy.
It is a pivotal time for the sector – like a chessboard – the next move a firm makes will determine its position when AI continues to expand and dominate.
Ransome suggested that true divergence between firms will be driven by deep-level redesigns of pricing and governance rather than mere structural shifts. He stated that it depends on whether firms commit to fundamental operational changes or settle for surface-level integration.
Going forward, as clients have greater access to data and information thanks to sophisticated AI, the work that graduates and junior staff would previously have spent days compiling can be skipped.
“The competition this year for high-performing senior talent across most service lines has increased significantly compared to the last few years,” Ransome added.
As the Big Four try to figure out their next move while plates spin, the ball is in the client’s court.