AI Disrupts Tax Consulting: Why Hourly Billing is Fading Fast

In an era of rapid technological transformation, the tax consulting industry stands at a defining moment. Artificial Intelligence (AI), once viewed as a futuristic tool, is now at the heart of a revolution—reshaping not only how tax professionals operate but also how clients expect to pay for their services. The age of hourly billing is slipping away, and a new model driven by value, efficiency, and transparency is emerging.

Kemp Munnik, structuring and tax strategy specialist.

The Rise of AI in Tax Advisory

From automating routine tasks like data entry and fraud detection to handling complex tax research, AI is accelerating the pace of work in tax consulting. A recent Reuters report predicts that AI will save up to 12 hours per week for tax professionals by 2030, significantly reducing time spent on repetitive tasks. As Johan Steyn, a respected AI thought leader, aptly put it: "AI isn’t replacing tax professionals—it’s transforming their roles."

Tax advisors are increasingly leveraging AI for predictive analytics, compliance risk analysis, and strategic planning. Natural language processing (NLP) is making tax software smarter and more user-friendly, while machine learning is boosting the precision and reliability of forecasts. These tools are allowing firms to deliver more insightful, timely, and strategic guidance—faster than ever before.

Clients Are Driving Change

Today’s clients aren’t just tech-aware—they’re tech-enabled. Many are using AI-driven financial tools themselves, which raises the bar for the kind of service they expect. They no longer want to pay for the time it takes to complete a task but rather for the value it delivers. In short, they want outcomes, not hours.

This shift is putting immense pressure on firms clinging to traditional hourly billing. Once the bedrock of professional services, the hourly model now feels outdated. With AI streamlining tasks that used to take hours into mere minutes, clients are rightly asking: Why should we pay for time when the outcome matters more?

The Move Toward Value-Based and Retainer Pricing

The new wave of billing models—value-based pricing, fixed fees, and monthly retainers—is gaining momentum. These alternatives not only align with client expectations but also reward firms for being more efficient and innovative.

“Clients want predictability and results,” Steyn noted. “They're more willing to pay a premium for fixed pricing because they know exactly what they're getting.” These models incentivize consultants to deliver better service, not just longer hours.

Retainer-based billing is particularly promising. It allows firms to offer a broad range of services—including crypto tax compliance, trust management, and equity planning—under a single, predictable fee. This approach promotes deeper client relationships, more consistent revenue, and better long-term planning for both parties.

Skills, Ethics, and Trust in the AI Era

As AI reshapes the landscape, the role of the tax advisor is also evolving. Firms now need professionals with not just technical tax knowledge but also expertise in AI, data analytics, and client communication.

However, the integration of AI isn’t without its challenges. Concerns around data privacy, security, and the reliability of AI-generated insights are valid. Ethical oversight and human judgment must remain central—especially when giving advice that can impact clients’ financial futures.

“Strong ethics, client transparency, and smart training programs will define the firms that succeed in this new era,” Steyn emphasized.

What Lies Ahead

AI is expected to become even more advanced, with agentic AI and real-time compliance tools soon becoming mainstream. Tax authorities around the world are digitizing their systems, which will further accelerate change in the industry.

Firms that embrace this transformation—by rethinking pricing, retraining staff, and adopting AI-powered solutions—will thrive. Those who resist may find themselves obsolete.

Conclusion: The Future is Value-Driven

The message is clear: the era of charging by the hour in tax consulting is nearing its end. AI is creating unprecedented opportunities for efficiency, personalization, and strategic value. For firms willing to innovate and realign their business models, the future is full of promise.

Adapt now—or risk being left behind.