How much of what you sell is Donkey Work?
I’ve been thinking about what we’ve learned about AI through mid-2026. Particularly how AI, as it exists right now, will impact professional service firms.
The initial hype about “this is the worst version of AI we’ll ever see” and “pretty soon we’ll be curing cancer and solving climate change” seems far-fetched today, but AI can create some efficiencies. And that capability will impact our businesses.
AI can do the Donkey Work
The more I think about the kind of work AI is good for, the more I think it fits in the category of donkey work (a phrase I borrowed from David Sparks). Donkey work is the kind of work humans don’t love; it’s repetitive and rote, so it doesn’t require much creativity or breakthrough thinking. It’s often assigned to inexperienced folks.1
And that’s great; even in a typical expert-firm engagement, there’s a lot of that work to do, and using machines doesn’t necessarily degrade the quality clients receive.
Law firms bill hours for research, summarizing precedent, contract review, and indexing discovery. Creative firms bill hours for interview summaries, call reports, and status decks. This is mostly donkey work that AI could do a decent enough job on.
How about your firm? What percentage of the work you deliver to clients is rote? It might require expertise, but not much judgment, creativity, or deep experience.
What AI isn’t good at is anything that requires deep domain expertise, like diagnosing and understanding what needs to be done, taking a complex problem, and figuring out the solution. And then, on the other end, once the work is done, figuring out whether it’s done well, whether it answers the question we set out to answer, and what we should do next.
So, there is still a lot of valuable expertise to sell.
But you bill for a lot of Donkey Work
So what’s the problem? The problem is that most professional service firms have been selling effort, often measured in hours. And the effort, the doing, is becoming easier and easier. It’s taking less time. So if we’re billing hours, the number of hours we’re putting into a project is shrinking.
A lot of the margin professional service firms make comes from this middle work. The low-cost junior employee that’s cranking through a lot of hours generates substantial billing for many professional service firms. So if that cohort of employees and category of work disappears, a lot of the margin in the professional service firm disappears too.
As AI does more and more of that work, whether you are proactive about it or your clients are demanding it, how will you make money on just the expertise portion?
We can’t bill for effort
The first thing I see is that effort cannot be used as a unit of measure, either in what we’re selling–we can’t be billing hours–or in how we’re planning the work. Automation will reduce effort. If we’re billing based on effort, our total fees will decline.
But it’s not just the gross fees. Your junior staff currently performs most of the work that stands to be automated. Many firms realize the highest margin on their lower-cost resources. If the number of junior hours you bill gets cut in half (or more), how much would you have to raise your rates to earn the same margin on that project? 20%? 40%? Would clients accept that higher rate?
Productization makes automation more profitable
If a firm chooses to lean into automation, the more standardized the processes, the more efficiently automation can produce efficient, high-quality outcomes. This may require firms to focus on specific problems for specific people and firms.
As your processes get more consistent, value pricing becomes easier because we can better understand the outcome and its value for our client. We might even be able to do outcome-based pricing because we’re seeing patterns over and over again: when we do this specific thing in this specific way, it produces these outcomes for this category of client.
Artisanal Services will survive
There will always be a market for artisanal professional services, for things that are done the old way. Just as we still buy furniture crafted by hand, there will always be those most consequential, and expensive, problems that require clearly human-built conclusions. So that market will be there, but it will be smaller and smaller, with stunningly expensive fees.
Most of us aren’t going to be Gucci or Lamborghini, so sooner or later we’ll have to face the question of niching and productization. The firms that lead this change will likely maintain higher margins while charging lower fees. The firms that lag will see their clients force change on them.
While these changes have happened quickly, there’s still some time to adjust. If you’ve resisted working in a niche, it’s time to face that fear. If you are billing largely based on effort, what experiments do you want to run to find out what your client really values (and it’s not effort)?
As always, if you are grappling with these issues, hit reply. I’d love to hear your thoughts.
