Every major technology shift has forced us to ask the same question:
What happens to the value of our work when technology changes how we deliver it?
Today, that question is about AI.
The latest catalyst is the IRS’s new guidance on artificial intelligence. Most of the conversation has focused on compliance. It reminds tax professionals that AI doesn't change our professional responsibility. We still own the judgment, the work product and the advice we give.
I couldn’t agree more. But after reading the guidance, I kept coming back to a different thought. I don’t think the biggest issue it raises is compliance. I think it’s pricing.
Accountants have too often asked themselves: “If AI helps us do the work faster, shouldn’t clients pay less?”
Absolutely not! The fact that we’re asking the question reveals the real problem. We’ve been measuring value by the wrong thing.
Time Was Never the Product
No client has ever hired an accountant to spend eight hours preparing a tax return. They hire us because they want confidence. They want someone who understands their business, protects them from risk and helps them make better decisions. Those outcomes are the product. The hours were simply the way we measured the cost of delivering them.
For decades that measurement made sense because expertise and time were closely connected. The more knowledge you developed, the more efficiently you could solve problems. Ironically, the better you became at your job, the harder it became to justify your fees under an hourly model. AI has accelerated that tension.
A task that once took four hours might now take 40 minutes, but:
Has the client’s outcome changed?
Has your responsibility changed?
Has your judgment become less valuable?
Of course not.
Responsibility Never Left the Professional
The IRS makes it abundantly clear that AI may assist with the work, but the professional remains accountable for the final product. You're still responsible for the judgment, the recommendations and protecting your client's interests. That means you're still creating the value.
AI amplifies your expertise, so why do firms feel obligated to apologize for becoming more efficient? We don’t expect surgeons to reduce their fees because robotic technology improves precision. Or architects to charge less because software produces better drawings in less time. We want professionals to embrace better tools that produce better outcomes.
Accounting shouldn’t be any different.
The Question the IRS Doesn’t Answer
One sentence in the guidance really caught my attention. It reminds practitioners that Circular 230 prohibits charging an “unconscionable fee.” Then it goes a step further.
The IRS says that when AI reduces research and drafting time, practitioners should openly pass those efficiencies on to clients and disclose AI-assisted work as appropriate. In other words, if you’re billing by the hour, the clock still matters, even if AI did much of the heavy lifting.
I understand why the IRS took that position. Under an hourly billing model, charging for time that wasn’t actually spent raises legitimate ethical concerns.
But I think that’s exactly the point.
The guidance isn’t exposing a problem with AI. It’s exposing a problem with hourly billing.
The IRS is telling firms how to bill in an hourly world. It's time to stop living in one.
That’s one of the reasons I’ve advocated for value pricing for years. In fact, I wrote Radical Pricing three years ago because I believed then what I still believe today: clients pay for outcomes, not effort. AI has only validated that belief.
With value pricing, clients aren't buying hours. They're buying confidence, professional judgment and better decisions. Whether that answer came from two hours of manual research, 30 minutes with AI assistance or a combination of both shouldn’t be the primary driver of the fee. That makes value pricing more relevant.
The Real Opportunity Isn’t Efficiency
For years, firms have measured AI by how fast it can complete compliance work. Important, but not the end goal. Capacity is.
When AI gives your team hundreds of hours back, you can produce more compliance work. Or you can spend more time identifying planning opportunities, coaching business owners and strengthening the relationships that lead to referrals, retention and advisory work.
You have answers more readily available. Your new bottleneck is now helping clients understand what the answer means and what they should do next.
Maybe AI Isn’t the Disruption After All
I’ve said for years that firms need to stop selling time and start selling expertise. The IRS guidance makes this more important.
Hourly billing assumes effort equals value. AI proves otherwise. Firms that continue selling hours will find themselves trying to explain why greater efficiency should result in lower fees. While the firms that price outcomes, judgment and relationships will see AI as a better way to deliver more value with greater consistency. That’s progress.
The IRS reminded us that AI doesn’t replace professional judgment. I’d take that one step further. If professional judgment is still what clients value — and still what we’re ethically responsible for — then maybe it’s time our pricing reflected that.
Because clients were never buying our time. They were buying our judgment all along.