MC.78: How much are you worth?

Hey everyone,

I want to start this week’s newsletter by a little story:

This week's reflection centers on a critical question that's reshaping entire industries: How do we redefine the value of work when AI can accomplish in minutes what used to take hours?

The Billing Hour Dilemma

A recent FT article highlighted how law firms are grappling with a fundamental challenge to their business model. Traditionally, legal services (like consulting and auditing) operate on billable hours - charging clients for time spent, often in 6-minute increments.

But here's the disruption: What happens when AI enables a lawyer to complete a task in 15 minutes that previously took an hour? Should they bill for 15 minutes or the full hour? This creates a misalignment of incentives - why would organizations adopt productivity-enhancing tools if all the gained efficiency must be passed back to clients?

The Margin Opportunity

This challenge becomes an opportunity for new market entrants. As Jeff Bezos famously said: "Your margin is my opportunity." Established players protecting traditional models create openings for disruptors willing to reimagine the entire value proposition. (hello Harvey and its $1.5 billion valuation)

Input vs. Output: The Core Question

We're returning to a fundamental debate from the digital transformation era:

• Are we paying for input (time spent) or output (results achieved)?

• Is value in the work done or the outcome produced?

If it's about outcomes, should there be value-sharing models? For instance, if a consulting firm increases a client's margins, should they share in that success? While performance-based models exist, they've rarely penetrated high-level professional services due to the risks of tying compensation to external factors beyond the consultant's control.

The Salary Implications

This debate extends beyond client services to employment itself. If an employee using AI can complete 40 hours of work in 10 hours, who benefits from those remaining 30 hours? The employee or the employer?

The productivity gains from AI aren't incremental - they're exponential. We're not talking about 10-20% improvements, but 300-400% efficiency gains in many tasks.

Redefining Professional Value

As individuals, this forces us to confront uncomfortable questions:

1. What is our value when technical execution becomes commoditized?

2. How do we leverage experience when effort and time are decoupled from output?

3. What career paths make sense when traditional markers of work (report length, hours spent, presentation size) become meaningless?

The Path Forward

The answer lies in focusing on uniquely human contributions:

• Strategic thinking and contextual understanding

• Relationship building and stakeholder management

• Creative problem-solving and innovation

• Quality judgment and critical evaluation

• Ethical decision-making in complex situations

Key Takeaway

We're witnessing a fundamental shift in how we measure and compensate professional work. The challenge isn't just technological - it's philosophical. How do we maintain the dignity and value of human work while embracing tools that exponentially amplify our capabilities?

The answer will define the future of professional services and white-collar employment for the next decade.

Cheers,
Olivier

Modern Chaos explores the intersection of technology, business, and society in an age of rapid transformation. Subscribe for weekly insights on how AI and other emerging technologies are reshaping our world.

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Until next Thursday 🎉