Alexis Kingsbury interviews Ron Baker, author and founder of VeraSage Institute, about why tracking time and billing by the hour harms professional services firms by distorting behavior, reducing margins, and undermining innovation.

Ron explains the “transformation economy” as a shift beyond services and experiences toward guiding clients from a current state to a desired future identity. He argues firms should market and price around transformation rather than tasks.

He describes how subscription models change pricing, KPIs, and financial thinking toward lifetime value, recurring revenue, and churn. He says the biggest barrier is unlearning cost-accounting and timesheet mentalities.

They discuss how AI reduces rote compliance work, increases pressure on hourly models, and frees up time for deeper client relationships. They also explore alternative metrics such as net promoter score, turnaround time, and “high satisfaction days,” as well as the need for specialization and stronger referral networks.

Timestamps

00:00 Timesheets Kill Innovation

Links

• Ron Baker – LinkedIn: https://www.linkedin.com/in/ronaldbaker/

Six months ago, Alexis built a 100% AI accountancy practice called Accrual Intentions. He called it an experiment. What he didn't say at the time: he was hoping it wouldn't work.

In this honest follow-up to Episode 164, Alexis shares what he's processed since — the board meeting that ran in eight minutes, the failures that turned out to be management errors rather than AI errors, and the data that suggests professional services firms have about eighteen months before the compliance work their juniors do today is largely automated.

The question isn't whether AI will change your firm. It's whether you'll be ready to manage it when it does.

Links:

Alexis shares the full behind-the-scenes story of building Accrual Intentions — a 100% AI-powered accountancy firm with 11 AI team members. The AI team completed a 7-month roadmap of 91 tasks and 107 deliverables in just 4 hours, with only 7 requiring human decisions. But the experiment also revealed serious dangers: a £43,000 profit-and-loss error stated with total confidence, terms of business that would have constituted a criminal offence, and every client-facing document pointing to someone else's website. The episode explores what this means for the future of accounting and the emerging skill of managing AI teams rather than doing the work yourself.