AI Agents & Agentic Workflows: Part 2/4
Disruption—It's Bigger Than Labor
For all those participating in the AI conversation of the last few years—it’s time to go deeper. When we talk about AI disruption we usually focus on efficiencies, reduction in labor costs and the inevitable disruption of labor markets. But what if this is only the tip of the iceberg? What if the real question is how these efficiencies will shift perceived value?
The true disruption might just be a paradigm shift in what people and companies are willing to pay for—and how this is going to reshape industries.
For sure, this coming shift will not affect all industries equally. It is likely that the industries that benefit the most from automated processes—particularly from advances in LLMs—are the ones that will be reshaped fundamentally. I’m talking about industries where the billable hour has ruled supreme—public relations agencies, management consulting firms, and public accounting practices, and of course the sector most known for the billable hour—law firms.
These are businesses that have relied, for decades, on the simple notion that time is money. You spend hours working on a client’s problem, and then you bill them for those hours. It’s a model that’s stood the test of time.
So what happens now that AI agents can do much of this work faster, better, and at a lower cost? With time being a much smaller part of the equation, what will clients be paying for? It is this question that will transform these centuries-old business models.
Of course, in some ways we’ve been here before. The efficiencies created by assembly lines transformed the value of products across industries; most notably in the automotive industry.
Let’s talk about cars.
Before Ford came along, cars were expensive, handcrafted machines. They took time to build, and that time was where the value was. People were paying for the labor, the craftsmanship, the expertise it took to build each car. And because of that, cars were a luxury only the wealthy could afford.
But then Ford did something remarkable. He created a system that slashed production times from 12 hours to just 90 minutes . Suddenly, cars were no longer about the painstaking labor that went into building them. They were about accessibility. Ford’s assembly line made it possible for the average person to own a car. The savings on labor were passed on to consumers, but as most of us are aware, that didn’t last forever.
Today, the average new car in the U.S. costs about $48,000, a higher percentage of a consumer’s net worth than it was 30 years ago. The reduction in labor and production costs is no longer passed on to consumers because consumers are now paying for something different.
Today when you buy a car you are investing in technology and brand. This means safety features, handling, connectivity and experience. Cars have become not only about status, but about a brand and image consumers identify with.
The value has shifted from the time it took to build the car to dependability and the experience of owning one.
Now, About Law Firms… (And A Few Other Industries)
The model that law firms and many professional service firms have we’ve relied on for decades, is built around billing clients for the time it takes to do the work.
At law firms, hours are spent reviewing documents, writing briefs, and developing strategies, and you bill for those hours. But AI is changing that. In law firms, AI can now perform document review, legal research, and even contract analysis faster than any human could . PR firms are using AI to generate media lists, track sentiment, and optimize campaigns. Consulting firms are automating data collection and even parts of strategy development.
The work is getting done in a fraction of the time. And that means the old model of billable hours is on shaky ground. Are law firms, and other billable industries going to start cutting fees because the work is done faster? Five our of five lawyers say probably not. So they must redefine what clients are paying for—they must redefine value. Here’s what that might look like:
1. From Time to Expertise
AI can review documents, but it can’t provide the nuanced legal strategy needed to win a complex case. It can pull data, but it can’t think creatively about how to apply that data to solve a client’s problem.
This is where firms will shift their pricing models. Clients will pay not for the hours spent, but for the outcome delivered. Now the real value lies in the strategic thinking, judgment, and expertise that AI can’t replace. Just like in the auto industry, where people are no longer being charged for how long it takes to build the car, but for the features and experiences it provides, clients will start paying for the insight and solutions that only human professionals can offer.
2. Outcome-Based Pricing
Instead of billing by the hour, firms might start charging based on results. And this fundamentally makes more sense. A client doesn’t care how many hours it took a lawyer to research case law or draft a contract—they care about winning the case, securing the deal, or closing the sale.
We’ve already seen hints of this in sectors like consulting, where some firms are experimenting with value-based fees that reflect the impact of their work, rather than the hours involved. Other professional services industries, such as executive search, have long had an outcome based fee structure.
3. Personalized Service and Relationship Building
As AI takes over the more mundane tasks, lawyers, consultants, and PR professionals will have more time to focus on relationship-building. This is going to be key.
The real premium in these industries will come from the personalized service they offer. Clients will pay more for firms that take the time to understand their needs, provide tailored solutions, and build long-term relationships. It’s a bit like luxury brands, where people aren’t just buying a product—they’re buying the experience and the service that comes with it.
4. Innovation as a Selling Point
In much the same way that Tesla revolutionized the car industry by focusing on technology and the future of mobility, law firms and other professional services will need to sell themselves as innovators. AI isn’t just a tool to do the same work faster—it’s a tool to offer new kinds of services. Predictive legal advice, smart contracts, real-time risk assessment—these are the innovations that clients will pay a premium for.
We’re already seeing this shift. Firms like Latham & Watkins and Baker McKenzie are investing heavily in legal tech, using AI to streamline processes and improve client outcomes . And it’s not just about saving time—it’s about offering something new and valuable that clients can’t get elsewhere.
And There It Is +
The disruption of AI agentic workflows isn’t just about automation or efficiency. It’s also about a fundamental shift in what we consider valuable. And dare I say, that’s not the whole iceberg either.
I’ll end today’s newsletter with one more thing to ponder: This shift we’re talking about—efficiencies that redefine value—isn’t just about billable hours or fees. It isn’t even just about business or how we work. It’s about our entire relationship with time and process.
I will be tackling this question in Part 4 of this 4-part series on agentic workflows, but first, as promised, I’ll be talking with near-futurist, speaker and author, Neil Redding, of Redding Futures. Stay tuned for Part 3!