Sidecar Blog

The Billable Hour Is Dying. Is Your Membership Model Next?

Written by Mallory Mejias | Dec 22, 2025 7:20:02 PM

In October 2025, two lawyers from a prominent UK firm launched Three Points Law, a legal practice built entirely on AI platforms from day one. No billable hours. No tracking time in six-minute increments. Instead, they use value-based pricing tied to outcomes rather than hours logged.

They didn't launch into a vacuum. Over a dozen clients signed on immediately, including established tech suppliers, media companies, real estate firms, and high-profile athletes. The market, it turns out, was ready.

This matters far beyond one firm in the UK. For associations serving professional services industries, Three Points Law represents a fundamental challenge to how your members operate—and potentially, how you charge them for membership.

The Problem with Billing for Ingredients

Professional services firms have long operated on a peculiar model. Imagine walking into a restaurant where the menu doesn't list prices. You order dinner, and when the check arrives, you're billed separately for the flour in your pasta, the minutes the chef spent sautéing your vegetables, and the time the server took walking to your table.

That's essentially how law firms, accounting firms, engineering consultancies, and architecture practices have billed clients for decades. You pay for the inputs—the hours, the labor, the time and materials—rather than the outcome you actually wanted.

This model exists for an understandable reason. Labor has traditionally been the primary variable cost in delivering professional services. If the main expense is people's time, building your pricing around that time makes a certain kind of sense.

But here's the thing: nobody has ever loved this arrangement. Clients face uncertainty about what they'll ultimately pay. There's a disconnect between the bill and the value received. And the incentives get weird—efficiency actually hurts revenue.

AI Changes the Equation

What makes Three Points Law possible is that AI fundamentally separates inputs from outputs. When document analysis, contract drafting, and workflow automation happen through AI platforms, the relationship between hours worked and value delivered breaks down entirely.

A firm using AI well can produce superior outcomes with dramatically fewer billable hours. That's good for clients and good for firm profitability—but it obliterates the logic of time-based billing.

Consider the competitive dynamics. In a market where Firm A and Firm B offer comparable services, pricing eventually compresses toward cost-plus margins. Everyone has similar costs, achieves similar margins, and profits get squeezed over time.

AI disrupts this equilibrium. Firms that deploy it effectively will deliver better results at lower internal costs, which means they can price more competitively while enjoying healthier margins. Firms that don't will find themselves increasingly unable to compete. There's really nowhere to hide.

The Uncomfortable Math for Associations

Here's where this gets personal for association leaders. Many professional societies charge membership based on firm headcount. If you're an accounting association, you might roll up individual memberships to the firm level based on how many CPAs work there. Legal associations often operate similarly.

This pricing approach treats headcount as a proxy for value. A 50-person firm presumably gets more value from membership than a 10-person firm, so they pay more.

But what happens when AI enables a 25-person firm to produce the same output that previously required 50 professionals? The association's value to that firm hasn't decreased—the firm still needs education, credentials, advocacy, networking, and industry intelligence. Yet under a headcount model, the association's revenue from that firm just got cut in half.

If your members are shifting to value-based pricing, the pressure will eventually reach your membership model too.

What Value-Based Membership Could Look Like

Some associations have already moved beyond headcount pricing. Trade associations, in particular, often use tiered models based on firm revenue or, for public companies, market cap. These approaches tie membership fees to the economic footprint of the organization rather than its employee count.

This kind of thinking offers a template for professional societies wrestling with AI's impact on firm structures. The goal would be aligning what you charge with the value you actually deliver—not counting bodies as a rough approximation.

What might that look like in practice?

  • Revenue-based tiers that scale with a firm's economic activity
  • Outcome-linked pricing tied to specific benefits like certification programs or continuing education
  • Hybrid models that combine a base fee with usage-based components for high-value resources

None of these are perfect, and each comes with implementation challenges. But the conversation needs to start now, before the shift in your members' business models forces it.

Your Role Goes Beyond Pricing

The membership model question is important, but it's actually the second-order issue. The first question is whether your association is leading the conversation about AI in your profession.

Somebody is going to train the lawyers of the world on how to use AI in legal practice. Somebody is going to help accountants understand what these tools mean for audit workflows and client advisory services. Somebody is going to guide engineers through the implications of AI-driven design and physical experimentation.

That somebody should be you.

Associations that become expert in how AI applies to their field—not just to internal operations, but to the actual practice of the profession—will find themselves indispensable. Associations that sit on the sidelines will watch that expertise develop elsewhere.

This means investing in understanding AI at a deep level. It means developing training and education specifically for your members' professional context. And yes, it means being willing to have uncomfortable conversations about what AI means for firm structures, billing models, and career paths.

The Billable Hour Won't Vanish Overnight

Highly specialized niches will likely maintain time-based billing for years to come. When domain knowledge is extraordinarily narrow and demand outstrips supply, practitioners can charge however they want.

But for the mainstream of professional services—the trillions of dollars in economic output currently billed by the hour—the model is shifting. Three Points Law isn't an outlier. It's an early signal of where the market is heading.

The associations that thrive through this transition will be the ones that lead it, both in how they serve their members and in how they structure their own business models. The ones that wait for the shift to force their hand may find they've waited too long.