Can you please explain the impact this will have on clients where we are currently running their mobile search and they have non-responsive websites? Do this impact both paid and organic search for them?
Re: non-responsive website
Having a mobile-friendly website, whether responsive or not, is now one of the ranking factors in organic searches from today. So, yes if a website is not mobile friendly it can witness falls in Google's organic rankings, now or in recent future.
Talking about its effect on paid searches (AdWords), today's update is not going to have any effect on Paid Searches. However, it is already into place since Nov. 2011. It's an important factor for ads quality. To put it simple, it does affect quality score.