Egan-Jones released a commentary on October 16, 2026, examining how artificial intelligence advances could compress margins at firms that sell expertise by the hour. The analysis outlines potential structural impacts on professional services, private markets, and the US housing market.
Professional Services Under Pressure
Audit, consulting, law, and engineering firms sit at the center of the analysis because they sell intellectual capital by the hour. Egan-Jones expects their prices to decline significantly as small teams using artificial intelligence match the output of large practices.
KPMG pressed its auditor to pass on artificial intelligence savings and won a 14% fee cut, a demand the commentary expects every audit client to make. Furthermore, seniority offers little protection since senior staff sell expertise that artificial intelligence now makes readily available.
Software and Private Markets Impact
For software providers, the commentary cites the Model Context Protocol, an open standard that lets artificial intelligence models connect directly to outside software and data, as making a product's own interface matter less. Egan-Jones sees pricing power eroding for legacy software and data providers, where a single product launch can now reprice a company in a day.
In private markets, Egan-Jones describes a quiet deflation in the value of money. Startups reach scale faster and on less capital because artificial intelligence does much of the work venture funding once paid for, compressing venture returns.
Housing Market Implications
Job losses among screen-based workers are identified as the channel to watch for housing. Home prices rose 1.6% in the year to June, staying below inflation of 3.5%, while the median new home cost 4.7 times median household income in 2025, up from 3.6 times in 1984.
Egan-Jones' view is that short-term downward pressure on prices will occur, while the long-run case for urban land holds. The commentary was written to offer institutional investors and risk managers a framework for assessing structural pressures.
Key facts and where they come from
- Egan-Jones released a commentary on October 16, 2026, examining artificial intelligence pressure on firms selling expertise by the hour.
Egan-Jones released a commentary examining how advances in artificial intelligence could compress margins at firms that sell expertise by the hour
- KPMG won a 14% fee cut after pressing its auditor to pass on artificial intelligence savings.
KPMG pressed its auditor to pass on AI savings and won a 14% fee cut
- The Model Context Protocol is an open standard allowing artificial intelligence models to connect directly to outside software and data.
the Model Context Protocol, an open standard that lets AI models connect directly to outside software and data
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