The cost structure of strategy work just changed

For thirty years the economics of strategy consulting rewarded the bench. The value a large firm sold was capacity: a partner's judgment, yes, but delivered through a pyramid of analysts who built the models, ran the interviews, and assembled the deck. The price of that judgment was the cost of the pyramid underneath it. Challenger carriers and vendors could rarely afford the pyramid, so they either overpaid for a junior version of it or went without.

AI changes the unit economics of the pyramid. The work that used to require six analysts and four weeks, the comparative analysis, the first-draft model, the synthesis of a hundred interview notes, now requires one operator and a few days. The judgment is still scarce. The capacity around it is not.

What this does to the boutique

It inverts the advantage. When capacity was expensive, scale won, and the firm with the biggest bench could absorb work the small firm could not. When capacity is cheap, judgment wins, and the firm with the best operators can deliver what used to take a bench, at a price challenger carriers can actually pay.

A small group of named experts will beat a large bench of generalists every time, once the bench stops being the moat.

This is the bet Alegris is built on. Not that AI replaces the consultant, but that AI replaces the reason you needed a hundred of them. The carrier still needs someone who has lived through a PSS migration to tell them which vendor promise is real. AI just means that someone no longer has to bill through a pyramid to deliver the answer.

Three things this changes in practice

• Pricing can be honest. Fixed fee on assessment, milestone on build, retainer on run, because the cost is judgment, not headcount-hours to be marked up.
• Engagements can be named. Every Alegris engagement is led by a principal you can name, because there is no anonymous bench to hide behind.
• Scope can be narrow. We can decline the work that does not fit, because we are not feeding a pyramid that has to be kept busy.

None of this is a prediction about the far future. It is already true for the kind of work challenger carriers and vendors actually buy. The boutique is not a romantic preference for small firms. It is the rational structure once the cost of capacity collapses.