AI driving firms, clients to revisit pricing models

A majority of accounting firms say they are changing their messaging around pricing as clients increasingly question their cost models in the age of AI efficiencies. 

This is according to a recent survey from professional services training company General Assembly, which polled 258 leaders with director and above titles at consulting, accounting and legal firms with at least 1,000 employees in the United States and the United Kingdom on a variety of AI-related topics. 

Within the wider context of professional services firms in general, 79% report that AI is changing pricing conversations, 42% say clients are questioning their pricing model, and 37% are addressing this proactively. This is especially true for midsize firms between 1,000 and 4,999 employees, with only 9% reporting no impact on pricing conversations at all, versus 31% at firms with over 5,000 employees. 

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Accounting firms specifically are slightly less impacted. The poll found that 35% of accounting firms report clients questioning their pricing model due to AI, 73% say they are changing their messaging around pricing, and 38% are doing so proactively. 

There is at least one major example of this happening recently, with Big Four firm KPMG having demanded an audit fee discount from Grant Thornton U.K. During negotiations, KPMG said Grant Thornton should pass on cost savings from the rollout of AI and threatened to find a new accountant if it did not agree to a significant fee reduction. While neither firm confirmed the negotiations, public records indicate GT did agree to a hefty discount. 

But while this may have been one of the biggest examples, Dan Priest, the AI leader for Big Four firm PwC, noted last year these conversations are happening all over. Clients, he told Bloomberg, have been hearing the firm discuss all the efficiencies it's getting from AI and want a share of those savings themselves. He added at the time that, where appropriate, the firm could give clients at least some of the pricing benefit, although PwC Australia's assurance leader Sue Horlin may dispute this as she said in an interview last year that services aren't cheaper because AI is quite expensive. For PwC it might not be a matter of more or less expensive overall but, rather, how it charges. Paul Griggs, PwC U.S. senior partner and CEO, said recently the firm will offer alternatives to the traditional hours-based billing model that has become the default assumption within the profession. Instead, some tax and advisory services will be more based on AI tools with a different service delivery model. 

The poll itself found this is not purely a PwC idea: 10% of accounting firms said they too are moving away from billable hours to focus on proprietary AI solutions and assets that clients pay to use. Still, this is a clear minority, reinforced by further data that just 35% of accounting firms intend to build AI-first products, solutions or assets, compared to the remaining 65% who plan to invest more in augmenting human efficiency. In addition, only 11% of accounting firms are moving toward a model where AI agents do all the heavy lifting. 

Still, while the share of such accountants is small, it remains material, indicating a shift where the traditional billable hour model doesn't make as much sense in a world where automation can complete processes in a fraction of the time they used to take. While the billable hour has been on the decline for years, the rise of AI in the profession has given the conversation new urgency, with many firms already moving into subscriptions or value-based pricing in anticipation of business model disruption. Ash Khanna, head of professional services at General Assembly, said these moves are driven by client demand as clients begin wondering why they're paying so much when AI is ostensibly dropping costs and speeding processes. 

"As AI makes work more efficient, clients are questioning traditional billable hour pricing models and demanding transparency," he said in an email. "Firms can protect margins by replacing billable hours with outcome-based pricing, using automation to accelerate delivery speed without growing headcount. Across professional services, I'm hearing that clients are increasingly interested in outcome-based pricing and many firms are already switching to this model for certain engagements."

For accounting in particular, he said firms might eventually shift toward proprietary agentic engines that provide permanent value on client infrastructure, and leadership might shift from project oversight to high-stakes judgment in order to provide human trust and ethical accountability that AI cannot replicate. But, he added, this will depend on accounting leaders embracing AI-first processes and workforce transformation. He believes firms have some challenges to overcome in terms of skills and competencies with AI, but ultimately sees encouraging signs they'll eventually catch up. 

"Right now, they are running up against skills gaps that prevent them from embracing an AI-native delivery model," he said. "Roughly half of accounting firms have had to abandon an AI project in the past year due to a lack of skills, and more than three quarters are still relying on manual checks and controls as AI governance. However, we are seeing investments made into a future model, with 73% planning to hire or train for integrity layer leads, or humans responsible for AI risk management and accuracy, in the next 12 months."

Headcounts holding steady versus AI

The survey also found that while no one said they were cutting staff due to AI, most were not hiring new staff either. The poll indicated that 67% of accounting firms plan to keep headcounts flat while relying on AI to drive efficiencies, while 12% are hiring more people to scale. This is a higher proportion than those in the consulting profession (46% keeping headcount flat, 18% hiring more) but lower than in law (74% keeping headcounts flat, 6% hiring more people to scale). 

This is fairly consistent with other data that shows people aren't necessarily going to get fired because AI took their jobs, but that fewer people will get hired in the future because there just won't be as much need. A survey of 258 FP&A professionals conducted by business planning platform Drivetrain found that many believe AI will lead to smaller, more efficient teams: 65.5% think that junior and entry-level roles are at most risk of automation; and 50% believe AI will reduce the headcount required for the FP&A function. 

Another study from Karbon found a significant fraction of accounting firms are changing their organizational structures to optimize for AI, especially when it comes to junior roles. The data showed 20% of leaders say they've already started outsourcing junior roles, redesigning their organizations to optimize for AI, and filling junior roles with AI. 

The General Assembly poll found that 70% of accountants believe junior roles will likely evolve in the future in terms of their responsibilities and skill requirements. When asked what skills they will need, the top answer was communicating with stakeholders (58%), followed by prompting and using gen AI tools in daily work (31%), AI governance, risk and compliance (30%) and translating client problems into AI use cases (28%). 

As for where these entry-level hires will go, 14% of the respondents said they would enter employer-funded training programs before starting work right away. However, slightly more respondents felt they'd be able to hire talent from the outside when they need it: 15% said they're relying on being able to hire senior talent from external sources in the future.