Beyond the billable hour
At a glance
- Matthew Burgess, a legal expert, argues that professional services firms must fundamentally redesign their business models in response to AI and digital disruption.
- He advised moving away from traditional time-based billing and emphasised value creation through intellectual capital rather than selling time.
- Burgess warns firms must adapt quickly to technological changes or risk becoming obsolete, drawing parallels to companies like BlackBerry that failed to innovate.
Speaking at a pre-Congress webinar hosted by the Institute of Public Accountants (IPA) Group, Burgess warned that traditional time-based billing models are becoming obsolete in an AI-driven world.
“If you’ve only been in this game for a handful of years, you know what technology has already done today,” says Burgess, founder of View Legal. “Technology is only going to increase even further.”
He highlighted recent developments in the US where the first fully automated tax return was completed without human involvement. This technological milestone is the start of a dramatic shift in the delivery of professional services.
“When you think about that through the lens of why so much private equity is pouring into the accounting space in the US, it may just be that they see where this is heading,” Burgess said.
The Triple F criteria – fun, flow and flexibility – replaces traditional time-tracking model
The disruption facing professional services isn’t gradual, according to research cited by Burgess. A Deloitte analysis shows the sector faces both a “short fuse” and “big bang” impact from technological change compared to other industries.
Burgess’s firm has abandoned traditional business practices, operating without timesheets for 12 years and without time-based billing for 13 years. Holiday policies, leave policies, and budgets have also been eliminated.
Instead, View Legal focuses on what Burgess calls the “triple F” criteria: “Are our team members having fun? Are they getting into flow? And do they feel as though they’ve got flexibility?”
This approach represents a complete departure from the factory-style time tracking model developed over a century ago. “Is a model that was developed by a factory literally over 100 years ago likely to still be the winning model moving forward?” Burgess says.
Purpose trumps time
He encouraged practices to focus on their core purpose rather than selling units of time. “If we get to the core of why we’re actually in the service industry, it will not be to track time, and it will not be to sell our time at all,” he says.” It will be to be fairly rewarded, appropriately rewarded for the intellectual capital that we are able to apply to any particular customer situation.”
Burgess drew parallels with once-dominant companies that failed to adapt to changing markets. He cited BlackBerry, which held 80 per cent market share just two years before the iPhone’s introduction, before rapidly losing its market share.
The consolidation in accounting, particularly in the US, suggests major market players are positioning themselves for this transformation. Even Amazon founder Jeff Bezos is investing in accounting firms, indicating the scale of change ahead.
“What is it that is wanting them to put a brand around those fees?” Burgess says. “What is it when they’re not actually particularly changing the business model at the moment that is coming down the pipeline that may be relevant to all of us?”
For firms looking to survive and thrive, Burgess recommended starting with the fundamental question of “why” they exist, following author Simon Sinek’s influential approach. Understanding this core purpose should drive what services firms offer and how they deliver them.
As AI and automation continue to reshape professional services, Burgess argued that success will come from creating value through intellectual capital rather than selling time. Firms that fail to adapt risk following the path of once-mighty companies that couldn’t keep pace with technological change.
Beyond the billable hour
AI will make obsolete traditional time-based billing as the technology. The future of professional services resided in high-value advisory work and technology-enabled systematic service delivery. Neither of these, Burgess argued, aligned with traditional hourly billing models.
He recommended implementing “after action reviews” depending on the matter, replacing annual performance reviews with real-time learning capture. This approach ensures valuable insights are preserved and can inform AI systems while maintaining client confidentiality.
Rather than focusing solely on revenue and billable hours, Burgess advocated measuring net profit per person across the entire organisation. “We think that technology has already been an enabler and will continue to be,” he said. “If we can find ways to sustainably drive that up, with at least a six-digit number as a heuristic, we might then start asking some fundamental questions about value”.
Maintaining premium positioning could be found in the “Rule of 7-11-4”: providing seven hours of excellent free content across eleven touch points through four unique media channels. This approach helps firms establish expertise before potential clients make contact.
“Google’s argument is that 95 per cent of any buying decision is made before the customer actually makes contact with you,” said Burgess.
This applied equally to existing and new clients. Burgess emphasised that firms must be “100 per cent certain they’ve delivered 100 per cent of the value to existing customers before trying to find new ones”. This was an aspirational goal to identify new opportunities to add value.
“It’s like the old Chinese saying about when’s the best time to plant a tree”, said Hayes. “It’s either 25 years ago or today. We started probably 12 or 13 years ago – we wish we’d started 25 years ago”.
