Moving away from hourly billing does not automatically lower the bill. The AI dividend has to be negotiated through a clear allocation of value, risk and measurable outcomes.
Key takeaways
- 01
Hourly billing rewards time, not speed
Time and materials links revenue to effort. When AI compresses research and analysis, providers may defend revenue through higher rates or value-based fees rather than pass every efficiency gain to the client.
- 02
Outcome pricing is not a discount
Linking fees to impact can align incentives when the baseline is clear and the provider controls the result. It also separates price from falling input costs, so buyers must distinguish value sharing from margin protection.
- 03
Negotiate the AI dividend in advance
Contracts can specify how productivity improvements affect price over time. Agree who measures and verifies the gain and how it is shared before efficiencies become a dispute about ownership.
- 04
Choose a hybrid that matches the work
Use fixed fees for defined work, output pricing for repeatable deliverables and gain-sharing for measurable savings. Retain time and materials for genuine uncertainty, and avoid holding providers responsible for enterprise outcomes beyond their control.
About the author
In this Medium post, apadua co-founder Gregory N. Vider examines the commercial consequences of AI in consulting, legal and tax services, focusing on pricing, measurable outcomes and the contractual sharing of productivity gains.
