Professional services firms that bill on time-and-materials are passing AI efficiency gains to clients as a discount, Vecteris CEO Nicole Merrill says, and should start with an urgent and expensive client problem, then test value-based pricing through a paid pilot.
CINCINNATI, Oct. 6, 2026 /PRNewswire-PRWeb/ -- Professional services firms that keep billing on time-and-materials (T&M) are passing their AI efficiency gains to clients as an automatic discount, according to Vecteris, which helps B2B professional services firms productize their services. Vecteris CEO and co-founder Nicole Merrill recommends that firms start with an urgent and expensive client problem, define the outcome and scope of an engagement that solves it, then test value-based pricing through a single paid pilot.
Two 2026 reports from Thomson Reuters show AI adoption and client expectations rising at the same time. Organization-wide AI use nearly doubled in a year, from 22% in 2025 to 40% in 2026, according to the AI in Professional Services Report. Corporate clients now expect their outside firms to use AI to improve the quality of their deliverables, but few say their firms are delivering those improvements. In the Future of Professionals report, 78% of corporate clients said AI-enabled quality improvements are very important or essential, yet just 6% said most of their providers deliver them.
"A service line leader recently described an efficiency gain to me that, for him, felt more like a revenue crisis," said Merrill. "AI had cut delivery time by half for his team's standard work and, on certain engagements, by three-quarters. Instead of celebrating, he wanted to know how his firm could replace the billable revenue that had vanished along with those hours."
Merrill cautions that switching to a fixed fee does not solve the problem on its own. A fixed fee with an open-ended scope moves the risk of scope creep from the client to the firm. And a fixed fee built from estimated hours keeps the price tied to effort rather than to the result the client receives.
Instead, Vecteris recommends a four-step pilot firms can run this quarter:
- Choose one recurring, well-defined service that solves an urgent and expensive client problem, and avoid the firm's largest or most politically sensitive one.
- Define what the client receives, how success will be measured, and what is excluded.
- Set the price using four inputs: the firm's strategy, the client's willingness to pay, the full cost of delivery, and the cost of credible market alternatives.
- Run a paid pilot with trusted clients, then compare the outcome, delivery effort, and client response with the original projections.
"While the price must still cover the resources required for delivery, those costs should establish the price floor rather than the ceiling," said Merrill. "Always charge for the pilot because payment provides clearer validation than positive feedback."
Firms assessing their readiness to move away from time-based revenue can take the Productize Maturity Diagnostic. Merrill writes more about protecting revenue as AI shrinks the billable hour on the Vecteris blog.
About Vecteris
Vecteris helps B2B professional services firms productize services, develop new products, and commercialize to scale revenue and grow faster. The women-founded, WBENC-certified firm is led by CEO and co-founder Nicole Merrill. Co-founder Eisha Armstrong has written or co-written three books on productization: Productize, Fearless, and Commercialize. Vecteris clients include CBRE, Korn Ferry, Mercer, and Euromonitor. The firm is headquartered in Cincinnati, Ohio. Learn more at vecteris.com.
Media Contact
Hayden Haller, Vecteris, 1 2064452603, [email protected], https://www.vecteris.com
SOURCE Vecteris
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