Is AI Shrinking Billable Hours or Creating Opportunity?  

Of all the benefits that come from using AI for tax research, saving time is probably the most obvious. But when arriving at answers takes minutes instead of hours, some firms are left wondering what that means for their billings.

It’s a fair question, though the wrong one to focus on. Accelerating your tax research doesn’t shrink revenue potential. It’s quite the opposite—provided you have the right billing method and the right strategy to redeploy your time.

In this article, we’ll cover what it takes to make this shift, including: 

• What the data says about AI efficiency
• Competitive advantages of AI-powered tax research 
• The mismatch between hourly billing and how AI delivers value
• Exploring new ways to bill for your work
• Ideas for turning efficiency into opportunity
• A real-life example from accounting firm Larson Gross Advisors

The Data Behind AI Efficiency

By now, most of us have seen or experienced just how fast organizations’ use of AI is accelerating. And this trend extends into tax, where over half of the tax practitioners surveyed for Blue J’s AI Tax Research Solution Outlook Report reported using some form of AI for tax research.

For practitioners accustomed to legacy tax research tools, switching to AI-powered research can be transformative. Traditional tax research tools often require you to spend hours crafting complex Boolean searches and mining through the sources to stitch together a comprehensive answer. With AI-powered tools, like Blue J, you simply ask tax questions conversationally and receive cohesive, source-backed answers in seconds. 

Here’s what Blue J’s user data tells us about the efficiency gains of AI-powered tax research: 

• 93% of tax practitioners surveyed say Blue J saves them time.
• 2.94 hours/week saved, according to tax practitioners surveyed.
• 75% reduction in research time.

But these efficiency improvements aren’t just from research. 18.8% of respondents to a Blue J user survey say drafting is their primary use for the application, so faster drafting (and faster client response times) is also a major contributing factor. 

A Mismatch Between Hourly Billing and AI-Driven Value

AI-driven efficiency adds up quickly, though that can sometimes seem like a double-edged sword. For firms that bill by the hour, every minute saved might also feel like money lost. But productivity and profitability don’t need to be at odds. With the right billing method, your firm can get the best of both.

Time has long been the way tax practitioners determine how much to charge for their work. The longer the task takes, the more billable hours. AI redefines this link between time spent and value delivered. Because the right tax answer is just as valuable whether it takes 10 hours or 10 minutes to produce. 

When you’re working with AI, your billing needs to reflect that value—not the time it took to get there.

“Embrace AI. Get excited about it! The world’s changing and this is our chance to do cooler, more creative work. Use tech to save time, but make sure to price for it.” ~ Jody Padar, The Radical CPA

Exploring New Ways to Charge Clients

The 2024 CPA.com & AICPA PCPS Client Advisory Services (CAS) benchmark survey revealed that firms are already increasingly moving away from pure time and materials billing. Depending on your tax practice and your clients, some alternative billing methods may be a better fit than others. To help you start thinking beyond the billable hour, here are a few options to consider:

Fixed-fee pricing charges a flat fee for pre-defined services, paid on a monthly, quarterly, or annual basis. 

• This allows for predictable revenue, assuming you keep scope creep and client complexity at bay.
• It also rewards efficiency, as the faster you deliver, the higher your margins.

Subscription model billing has clients pay a recurring fee at pre-defined intervals (often monthly or quarterly) for ongoing access to a bundle of expert services.

• This approach builds steady cash flow and leaves room to integrate advisory services as part of ongoing work.
• The subscription model requires clear scope and boundaries to prevent over-servicing clients.

Value-based pricing lets firms charge based on the outcome or benefit rather than time spent. 

• This approach rewards your firm’s unique expertise, creativity, and judgment.
• Success hinges on a strong framework, frequent client communication, and trust in the fee.

Turning Efficiency Into Opportunity

Aside from adapting your billing for AI, you’ll also need to adapt your work. Firms reclaiming hours previously spent on research and drafting can repurpose that extra bandwidth for offerings further up the value chain. This consultative, relationship-driven work can then be billed at a premium because it relies on judgment, foresight, and highly personalized strategies—all of which require professional expertise and experience.

“If clients think they can use GenAI to replace us, either their tax compliance wasn’t that complicated, or they misunderstand the value that we bring. Either way, it frees us up to work with clients that value our services.” ~ Ashley Francis, CPA, Owner, The Francis Group, PLLC

Pursue more complex advisory and strategic planning

What exactly those advisory and strategic services look like is going to depend a lot on your clients. For some, it might mean taking on a few simple tax strategy planning sessions. For others, it could mean assessing cross-border tax implications, modeling alternative business structures, or even more complex challenges. 

What’s the impact? Clients are willing to pay more for strategic services because the work directly influences key business outcomes. 

Accounting Today reports in its 2025 Year Ahead survey that firms expect to spend more time on advisory services. However, they also report that there are “elements of friction holding them back.” Time saved through AI-powered tax research could help to eliminate this friction.

Strengthen client relationships

Beyond providing higher-value services, you can also make your existing services feel more premium. Time saved on tax research can be reinvested into higher-touch client service, including quarterly check-ins, mid-year tax planning sessions, and even short educational updates that position your firm as a proactive advisor. 

What’s the impact? These moments build trust and differentiate your firm from competitors who are still operating transactionally. They also create natural openings for advisory upsells and cross-service opportunities.

Develop talent and deepen expertise

Busy firms can struggle to find time for staff mentoring and professional growth. When AI efficiency removes the constant time pressure, senior staff have more room to coach junior practitioners and invest in advanced training. AI can also play a direct role in educating juniors, helping them to gain an overall understanding of new tax topics, as well as how to verify tax answers. 

What’s the impact? Investing in firm talent leads to stronger recruitment, better retention, faster skill development, and a team that can handle higher-value strategic work.

Seeing the Change in Action at Larson Gross Advisors

The firms that act on these opportunities are already seeing results. Take Larson Gross Advisors for example. This Washington State-based accounting firm replaced its difficult to use (and highly underused) legacy tax research tool with Blue J in hopes of making research easier and improving adoption across the firm. The results are impressive: 

• 71% of users are active weekly.
• Each user asks an average of 3.5 questions a day.
• Staff now save about two hours per week while producing faster, clearer, and more client-ready deliverables. 

Rather than treating those hours as lost time, the firm has redirected them into strategic advisory work. Staff are now helping clients think through important decisions, model scenarios and tax treatments, and analyze the larger impact of their choices. As Partner and Tax Practice Leader, Tanya Silves, puts it, “We’re there to do life with them.” The shift has also prompted a move toward value-based pricing, which better reflects the speed and quality of their work. 

Build a More Profitable Future With AI

When it comes to using AI for tax research, accountants are optimistic. Among those surveyed for Blue J’s Outlook Report, 86.6% agree that AI-powered tax research provides a competitive edge. As for what that competitive advantage looks like, time savings took a top-three spot, with 83% seeing this as a key benefit of AI. 

The firms set to thrive in the AI era will be those who see this efficiency not as a threat to their revenue, but as the foundation. Get started with Blue J to explore how you can join them.