Professionals, including tax practitioners, believe the rise of AI will lead to a decline in hours-based pricing models, according to a
Almost half of the respondents, 44%, predicted that, within the next five years, fewer will use the hours-based pricing model that is so common in firms today. In contrast, only 11% said there would be more firms charging by the hour, and 30% said it would be about the same.
A big part of this is because professionals predict the number of hours to do things will likely fall as firms become more familiar with AI. Poll respondents right now work an average of 46 hours a week. Thomson Reuters found that, with the predicted pace of AI adoption, respondents expect to free up four hours a week in the next year; eight hours a week in three years; and 12 hours a week in five years. In such a case, continuing to charge by the hour may be challenging.
"The future of professional services lies in embracing value-based pricing," said he report. "As AI transforms work processes, firms must develop models that reflect their true value to clients. This shift moves away from traditional hourly rates to pricing structures that capture the efficiency, expertise, and innovation AI enables."
What do professionals plan to do with all this extra time? According to the poll, the top answer is to relax. Or, more specifically, "work-life balance/well-being/hobbies/rest," cited by 24% of poll respondents. The proportion was even higher for those who work in tax and accounting firms: 34%. This is in contrast to those who work for law firms, who said they want more time for business development and marketing tasks, corporate accountants, who want more time to seek improved efficiency and perform strategic work and planning, and those in government agencies, who said they would likely devote more time to core tasks and long-term projects.
This is despite predictions that AI will also lead to more work being done in-house versus outsourced to other companies. Thomson Reuters found 33% of professionals believe AI will lead to more work being done in-house versus the 19% who say the opposite; 36% think it will remain about the same. At the same time, when work is outsourced to another company, 29% of professionals predict this work will become more valuable versus 22% who think it will be less. It appears that professionals believe AI will allow companies to bring in the lower value tasks they may have outsourced previously (e.g., accounts receivable), while paying more for the highly specialized tasks that they'd outsource.
"In-house departments are striving to shed the 'cost center' label, leveraging AI to handle routine tasks and focus on more complex, strategic work. Concurrently, external advisors will continue to offer specialized experience and high-stakes advisory services. This shift in work types allows in-house teams to enhance their strategic leadership while still relying on firms for critical expertise," said the report.
Thomson Reuters also rated professionals' opinion on generative AI outputs. Overall, professionals seem to think AI is OK — not great, but not terrible. Only 7% said the outputs were poor, while 50% said they were a basic starting point. Only 4% said that generative AI produces outputs better than anything they could have come up with themselves.
"Respondents said they feel that AI can provide a basic starting point, but in most cases, professionals will still need to take the lead," said the report.
