The Billable Hour is Dead

Summary

Paul and Rich break down the consulting industry and what AI means for it. Rich divides consultants into two categories: management consultants who tell you what to do (the apex consultant who charges big money, delivers a deck, and disappears), and execution consultants — the armies of 28-year-olds backed by outsourced teams who actually implement the plan. The first kind, grounded in personal relationships and trusted expertise, will be fine. Nobody is going to delegate a hundred-million-dollar acquisition decision to ChatGPT. But the second kind — the ones who bill hourly to produce artifacts like decks, documents, budgets, and training materials — are truly under threat because AI excels at exactly that kind of bureaucratic output.

The episode features an extended and entertaining roleplay where Paul and Rich act out a realistic exchange between a consulting firm partner and a client pushing back on bills, showing how the negotiation actually works in practice. Rich’s key advice to clients: stop working with the consultants’ currency (the billable hour) and start valuing outcomes. Use AI to generate the same artifacts the consultants would produce, show it to them, and demand accelerated timelines. Paul closes with the observation that software is now like creating a deck — if you’re seeing a PowerPoint instead of a deployed application, you should question everything about your engagement.

Highlights

”The Shorter the Deck, the Bigger the Bill”

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“There’s a saying in consulting: the shorter the deck, the bigger the bill. Say your piece, explain rationale, tell them what they should go do and then let someone else go do it.” — Rich Zottoli, 9:30

”It’s Someone Who Takes Your Watch to Tell You the Time”

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“The classic line is it’s someone who takes your watch to tell you the time.” — Paul Ford, 1:48

”The Management Consultant Becomes Translucent and Disappears”

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“The moment they say, ‘Can you do it?’ that management consultant somehow becomes translucent and disappears. Pops the smoke. And then 28-year-olds show up. Lots of them. Lots and lots of them. Backed by enormous outsourced teams.” — Rich Zottoli, 12:30

”AI Is Really Good at Bureaucracy”

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“AI is really good at bureaucracy. It’s spidered the whole web and pulled in all these documents. So many things on Earth are actually about how to comply with an ISO code or how to get your mortgage structured.” — Paul Ford, 14:30

”I Want to Pay 20% Less. Please.”

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“Paul, they’re screaming at me. I want to pay 20% less. Please. Just give me something, man. I got the guy tomorrow morning at 9:00.” — Rich Zottoli (roleplaying a client), 20:00

Key Points

• Rich’s catchphrase (1:10) - “The billable hour is dead” is something Rich says constantly; they’ve put it on slides but never fully unpacked it
• Why consultants exist (2:00) - Companies hit rough patches or need expertise; hiring consultants says to your team “you are inadequate and I need someone who wears nicer clothing”
• Compliance consulting (3:00) - A huge chunk of PricewaterhouseCoopers-type work is evaluating public companies for compliance with laws and taxation
• Rebranding example (4:30) - Google’s rebrand was the best-executed thing Paul ever saw — all buildings, websites, everything changed over a weekend
• Pentagram and holistic consulting (5:00) - Good consulting isn’t just the logo; it’s the magazine, annual reports, website, checks — the whole process
• Two categories (7:30) - Management consultants who tell you what to do vs. execution consultants who do the work
• The shorter the deck, the bigger the bill (9:30) - Management consultants avoid building anything because “in execution lies all risk”
• Partners are rainmakers (10:00) - Partners will be fine because you cannot replace relationships and trusted expertise with AI
• Eye contact is worth $200K (10:30) - For a hundred-million-dollar decision, you’re paying $200K for the ability to look someone in the eyes and ask “should I buy them?”
• Consultant disappearing act (12:30) - When the client says “Can you do it?” the management consultant “morphs into a thousand hummingbirds which fly away”
• The billable hour army (13:00) - Execution consultants bill 18 people times 70 hours a week; their work producing artifacts is truly under threat from AI
• Data rooms are a tell (14:00) - If you hear the word “data room,” you’re about to get fleeced; they’re glorified file folders with a Windows XP interface
• The realistic negotiation (18:00) - Extended roleplay showing how a client pushes back on consulting bills when AI tools can produce the same artifacts
• The Seventh Seal metaphor (22:00) - Like the chess game with Death in Bergman’s film, consultants can delay but can’t ultimately win against AI displacement
• Client advice (24:00) - Use AI to generate the artifacts yourself, show them to the consultants, and demand accelerated timelines instead of price cuts
• Software is now like creating a deck (28:00) - If you’re seeing a PowerPoint instead of a deployed application, question everything about your engagement

Mentions

Companies

• PricewaterhouseCoopers (1:30) - Big Four consulting firm, compliance and audit
• McKinsey (6:30) - Classic management consulting firm; wrote the M&A textbook
• Accenture (1:30) - Major consulting firm
• Deloitte (1:30) - Major consulting firm
• Booz Allen (1:30) - Strategy consulting firm
• Google (4:30) - Example of perfectly executed rebrand over a weekend
• Pentagram (5:00) - Legendary design firm
• Aboard (28:00) - Hosts’ software generation platform; born out of years of consulting
• Criterion Collection (22:00) - In the same building as their office
• Goldman Sachs (10:30) - Referenced as prior employer of a hypothetical senior consultant

Products & Technologies

• ChatGPT (18:00) - Tool clients can use to generate artifacts that consultants would bill for
• NetSuite (15:00) - Enterprise software used for compliance
• ISO 9001 (14:30) - Quality management standard used as example of bureaucratic work AI excels at

People

• Ingmar Bergman (22:00) - Director of The Seventh Seal, referenced as metaphor for consultants playing chess with Death (AI)

Surprising Quotes

“You cannot replace relationships and expertise and trusted expertise that is brought in. That is just life. That’s humans actually relying on humans. It’s something very fundamental.” — Rich Zottoli, 10:00

“When you hire consultants you have said without saying the words to your entire team: you are inadequate and I need to get someone who wears nicer clothing, drinks better wine, and has a better degree.” — Rich Zottoli, 2:00

“It’s very important to not devalue your perceived value by doing the work. It’s actually dangerous.” — Rich Zottoli, 11:30

“If you want to know if you’re about to get fleeced, the word ‘data room’ is a tell. They’re glorified file folders. Take Dropbox and put a Windows XP interface on it and charge $10,000 a doc.” — Rich Zottoli, 14:00

Transcript

0:00 Hi, I’m Paul Ford. And I’m Rich Zottoli. And this is the Aboard podcast. It’s the podcast where we talk about how the world of software is changing because of AI. And boy is it. So there’s a lot to talk about. So let’s get into it and play the theme song.

0:50 You know, Rich, how you doing? We haven’t talked about — we don’t banter on the podcast much anymore because it’s all AI, AI, let’s go. How’s the family? Family’s good. We should move to a couch and just meander. You’ll triple listenership if we just sit on a couch and talk about how a certain burrito I just ate isn’t sitting well with me.

1:10 Speaking of not wearing pants, I want to talk about consultants. Oh boy. If consultants show up not wearing a lot of pants, just blazers, get the hell out of there as quickly as possible. It means a reorg is coming. You like to look at me sometimes and go, “The billable hour is dead.” I do say that. You say that to everybody. It doesn’t land as a threat for some reason.

1:48 The classic line is it’s someone who takes your watch to tell you the time. So we’re talking about big companies — PricewaterhouseCoopers, McKinsey, Accenture, Deloitte, Booz Allen. If you see an ad for a company but you have no idea what it does, that means they’re huge. What do they do all day?

2:00 Why would a consultant show up? As companies get big or hit a rough patch — a competitor blindsiding them, sales declining — they look for advice. When you hire consultants you have said without saying the words to your entire team: you are inadequate and I need to get someone who wears nicer clothing, drinks better wine, and has a better degree.

3:00 You’re missing one of the big chunks which is compliance. An enormous amount of that industry is evaluating public companies for compliance with laws, taxation. They come in and implement software to help you stay compliant. At the end of the fiscal year, PricewaterhouseCoopers says “good job, you did not break any laws.” That’s millions of dollars for really big companies.

4:30 In some cases it doesn’t make sense to have people in-house. Like if you’ve decided it’s time to rebrand — there could be a six-month exploratory journey. Google’s rebrand was the best-executed thing I ever saw. They changed their font, all the buildings, all the websites, everything — over a weekend. A lot of physical plant, a lot of products, and they rolled it out and it really worked well.

5:00 Pentagram, one of the legendary design firms — you don’t just go to them for a logo. They also help you with your magazine, annual reports, website, the logo on your checks. That is what consulting is supposed to do — not just do the thing but get the whole process right.

7:30 I see the consulting world in two categories. Consultants that tell you what you should go do — the management consultant. It’s the best consultant because they tell you what you should go do, charge you a lot of money, and then don’t care if you go do it or not. And consultants that’ll do the thing for you.

9:30 There’s a saying in consulting: the shorter the deck, the bigger the bill. Say your piece, explain rationale, tell them what they should go do and then let someone else go do it. “Why would you ever build anything? You should never build or do anything. You should think your thoughts, deliver your thoughts, and run as fast as you can because in execution lies all risk.”

10:00 Partners — their job mainly is to bring business in. They’re going to be fine. You could have the slickest AI prompt in the world. But you cannot replace relationships and trusted expertise. That’s humans relying on humans. For a hundred-million-dollar decision, you’re paying $200K for eye contact. Why would you spend 20 bucks a month and delegate that?

12:30 The management consultant’s pitch goes incredibly well. They turn back and say, “Can you do it?” The moment they say that, the management consultant somehow becomes translucent and disappears. Pops the smoke. And then 28-year-olds show up. Lots of them. Backed by enormous outsourced teams. Armies of people show up to execute.

13:00 Those people’s billable hour is truly under threat because a lot of what they do is produce artifacts — documents, product requirements, decks, presentations, budgets. This is where AI is truly additive and a true accelerant.

14:30 AI is really good at bureaucracy. It’s spidered the whole web and pulled in all these documents. So many things on Earth are about how to comply with an ISO code or structure a mortgage. If you need a deck so each division can be aware of ISO 9001 quality management, it’s really good and much faster.

14:00 Heft of output is very comforting to clients. Not just a big deck — a folder. “We are going to create a data room.” If you want to know if you’re about to get fleeced, the word “data room” is a tell. Take Dropbox and put a Windows XP interface on it and charge $10,000 a doc.

16:00 The currency for execution consulting is the billable hour. 18 people times 70 hours a week and at the end of the month we’re going to do some math. They’re implementing, sometimes delivering a thing, but the thing is often incidental to a process change inside the organization that requires a lot of PowerPoints and conversations.

18:00 [Roleplay] “Hey, congrats on the promotion to senior partner at Consulting Co. Question though — the bills are coming in. They’re big. I’m seeing AI producing research and decks. You got a dozen people just on research. God, these tools are good and I feel like I’m still paying the same bill. Why am I not seeing that efficiency trickle back to me?”

20:00 “Things are changing very rapidly. We’re keeping close on it. I think we’ll be able to accelerate and move things up in the roadmap.” And here is what half the clients would say: “Paul, they’re screaming at me. I want to pay 20% less. Please.” And then it devolves. And then we get a drink and they say, “Just give me something, man. I got the guy tomorrow morning at 9:00.”

22:00 The billable hour is dead is kind of dramatic mainly because humans slow everything. We can delay death. Like the chess game in Bergman’s Seventh Seal — he keeps not wanting to lose the match. He knocks over the pieces every time, hoping death doesn’t remember. But death always remembers. You can’t win.

24:00 Advice to the client: pause, think about the value you’re trying to get. You’ve been working with their currency, the billable hour. The truth is you can get your value cheaper. The easiest way is go make their assets and show them to them. Plug in ChatGPT. Be like, “What do you think?” Get them to give feedback. Then say, “Obviously you’re not building this. ChatGPT did it. Can we accelerate the schedule?” Which is equal to 20%. Then all they can do is wiggle in their chair.

28:00 Software is now like creating a deck. If you’re seeing a PowerPoint instead of a deployed application, you should question everything about your engagement. We’re starting to take on work that consulting firms would love to get, at a fraction of the cost. Hit us up at aboard.com.

30:00 I think consultants are going to do fine. They’re just going to be something real different in the future. There’s more change coming than that part of the world is fully ready for. I do believe that. Fun chat, Paul. It’s cool to roleplay. If you need us, hello@aboard.com. We love you and we’ll talk to you real soon. Have a great week.