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McKinsey Terrified as It Realizes AI Can Do Its Job Perfectly

Illustrious consulting firm McKinsey is staring down the barrel of AI. All those highly-paid suits are at risk as AI agents, AI models designed to autonomously carry out certain tasks, promise to do what they do with instant results — and without six-figure salary demands. "Do I think that this is existential for our profession? Yes, I do," Kate Smaje, a senior partner tapped to lead McKinsey's AI efforts, told the Wall Street Journal. But, she insisted, "I think it's an existential good for u

What Does Consulting Do?

This paper provides the first systematic and comprehensive empirical study of management and strategy consulting. We unveil the workings of this opaque industry by drawing on universal administrative business-to-business transaction data based on value-added tax links from Belgium (2002-2023). These data permit us to document the nature of consulting engagements, take-up patterns, and the effects on client firms. We document that consulting take-up is concentrated among large, high-labor-product