2Bobs—with David C. Baker and Blair Enns Is AI Going to Kill Labor-based Pricing?
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Mar 25, 2026 A lively look at why billing by the hour may not survive AI-driven productivity gains. They explore alternatives like productized services, subscription and value-based pricing. Practical tactics for converting clients away from timekeeping get discussed, plus predictions for which firms will adapt and which will stay stuck in old models.
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Agency Told Procurement Forces Hourly Deals
- A large agency told Blair all their relationships remain labor-based because procurement demands it.
- David warns procurement won't move you off time; they'll in-house work or hire smaller shops instead.
Procurement Clings To Hours While In-Housing AI Work
- Procurement will insist on hourly models while simultaneously in-housing commoditized work enabled by AI.
- The remaining high-value work will go to smaller, more nimble firms that won't charge by the hour.
Convert Your Firm One New Client At A Time
- Reinvent your firm one new client at a time by drawing a line today and refusing to sell time to new clients.
- Use new business conversations to introduce alternative pricing so your client base naturally converts over 3–4 years.
