Via Going Concern: Killing the Billable Hour With VeraSage's Ron Baker
I got to grill VeraSage's Ron Baker this weekend for my column this morning on Going Concern and it couldn't have come at a better time.
Stay tuned for an exciting announcement about where JDA is taking her own "hours" but in the meantime, enjoy my 15 minutes with Ron!
In his 15-some years crusading against the ridiculous measurement of “time” as a performance gauge, Ron has made quite a few steps in the right direction. Seven to ten percent of 90,000 firms have moved away from time sheets and toward “value pricing”, with 1,000 or so firms eliminating the billable hour completely. While he admits it’ll be a cold day in hell when the Big 4 follow suit, he’s encouraged by the momentum.
“There is a change and it is coming from customers,” he says, “[unfortunately] the billable hour has survived many recessions.” The rigid “that’s how it’s always been” structure of public accounting, specifically, doesn’t seem to be taking the idea well. “They’d rather be precisely wrong than approximately right,” he says of major accounting firms trapped in the billable hour vice.
Encouraging value pricing in pay structures is a slow process, he says, equating the movement to that of Germ Theory in the 1800s. It was hundreds of years from the time “contact contagion” was theorized to the time it was generally accepted in medicine and eliminating the antiquated pricing structure of employee incentive won’t go down without a fight either.
If you'd like to read the rest (you should, especially if you're like JDA and get done in an hour what most people can't manage to tackle in a week - suck it, underachievers!), head over to Going Concern. Please, or else my editor will beat me.