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As artificial intelligence transforms how knowledge work gets done, the billable hour may be living on borrowed time, The Wall Street Journal writes.
Columbia Business School professor Rita Gunther McGrath argues that pricing professional services by the clock becomes absurd when AI can scan contracts, draft documents and crunch analyses in minutes instead of weeks.
Firms that deploy AI most effectively could actually earn less under hourly billing, even as they deliver better results faster. That mismatch is pushing law, accounting and consulting firms to test alternatives such as value-based fees tied to outcomes, subscription and retainer models, and always-on advisory services powered by AI.
The shift could also upend the traditional pyramid structure, replacing armies of junior associates with lean teams of senior experts who plug in technology and specialized talent as needed. In this world, competitive advantage will hinge less on hours logged and more on judgment, creativity and client relationships.
