How AI Is Forcing Accounting Firms to Rethink Pricing

Shawn: It is one thing to put a fixed price on advisory. It’s another to go through the harrowing exercise of saying we’re not just going to put the label advisory on it and put a fixed price on it. We’re going to name what the outcomes are. We’re going to put a price on the outcome. And that ultimately, I think, is the work of the packaging: to take this bucket of stuff called advisory and to break it out into specific outcomes, and then work backwards to see all of the activity that drives toward that outcome.

Tom: All right, on this episode of the Modern CPA Success Show, we’ve got another great guest with us. For introductions, I’m Tom Wadelton, virtual CFO with Anders. My co-host as always, Adam Hale, and Adam runs our VCFO practice. Adam, welcome.

Adam: Hello, Tom.

Tom: So, we’re excited. Shawn Yeager is with us today, and Shawn’s the founder of Upshift. Shawn, welcome.

Shawn: Thank you so much for having me. I appreciate it.

Tom: With that very brief introduction, we’d love to hear more. So tell us a little bit about your story and what brought you to be with us today.

Shawn: Sure thing, and thank you again, Tom. So the brief career arc of mine is emerging technology through different waves. For me, as a graybeard, that begins on Microsoft’s first browser team, having a front row seat to what the web unleashed, and into software as a service, cloud, into things like streaming media, most recently digital payments, and now AI. Through these waves, the observation that I and many others have made is that they are disruptive as much as they are empowering. Generally the first phase is efficiency. We adopt the technology, we gain efficiencies. And then that which tends to differentiate the real winners from the rest, that separates the pack, are those that change what they sell. They change what they package and price and offer, which I know is near and dear to your hearts and to those of your listeners. So this really is a realization that here we are in another wave. I would argue it is probably one of the most pronounced, certainly in my life, if not the most. And we’re in that adoption phase. Where Upshift is focused is saying yes, adopt, yes, capture those efficiencies, but also quite critically look at what you can offer, what you can sell, and how you can generate revenue in ways that are at least defensive, but hopefully offensive and new.

Tom: That’s fantastic, and you’re already helping me learn something here. One thing people talk about with AI is that AI is so different from anything we’ve ever seen. I like that you’re saying, hey, we’ve seen this kind of technological change before. I’m agreeing with another piece of your argument also, and we talked about this a second ago before the show started. For many people, when it’s you should be doing things with AI, a lot of it is personally think about how you can do it and look for efficiency.

Shawn: Yes.

Tom: Not many people are talking about how are you going to change your services outwardly facing to your customers, which I think is the majority of your pitch. Is that fair?

Shawn: It is. And I know, having listened to several episodes that you’ve had quite recently, you’ve had some brilliant voices on that have covered that gamut. In short, yes, I think that is the second major step: what can we now offer that we couldn’t before.

Tom: I’ll let you repeat a little bit of what I saw on your website, which is the case for it. So you have said here’s what’s going to happen in some of the accounting work, and I’m reading through the stuff and I’m happy to say it if you want, but you can probably do it better. What are we seeing, the change that would force someone to say either opportunistically or defensively you have to make this change?

Shawn: So much I know that you have covered in depth, but I will, at the risk of repeating, state that one of my primary observations, in other fantastic conversations like this and in events and with clients, is that billing by the hour will likely outlive us all, for good or bad, but the billable hour as a unit of value is forever changed. And again, at the risk of repeating, it is the separation of the doing from the judgment and the trusted advisory that firms like yours deliver, and the value of that is proportional to the risk of getting it wrong, or the cost of getting it wrong. I would suggest that as a virtual CFO delivering CAS across the service lines, it is so often the risk of getting it wrong that drives someone to a firm, to a professional, rather than DIY. And so while increasingly, and I see this with my fantastic accounting firm, we will do some of the pre-work and take it to the consummate professional to review and sign off. Certainly what I value, as I would for example in the legal profession, is how do I orient my choice and what I’m willing to invest in that service, and most of all the outcome, along the lines of what if I get it wrong. That is all to say that there is, I think, this unbundling of the billable hour as a unit of value, and there is the ability to move from say on call to always on. I talk about these three shifts, and not to go too far in the weeds, but there are these three shifts occurring across delivery, packaging, pricing, and ultimately what does that offer look like. So I’ll pause there, but I think it is an evaluation of the unit of value, which the billable hour has been a proxy for time immemorial, and it is what is now possible that we can deliver that will offset some of the compression and grow the business.

Tom: Okay.

Adam: Yeah. I think that’s what I’m most interested in diving into a little bit. Everybody’s always talking about margin compression, margin compression. You’re going to gain all these efficiencies, which by the way, my experience has been negative efficiencies. There’s been a lot of really nice-to-haves and there are really cool outputs that it’s had, but from an investment in cost and time and everything like that, I haven’t met really anybody that’s seen a huge ROI to this point. Not saying that it won’t come and it won’t be there, but then what ends up happening is, I guess where things are a little tough right now is customers are assuming or thinking that you are gaining all these efficiencies, and so there is this kind of margin compression that might not be available at the present time. It could be in the future. So I’m more interested in looking at it more optimistically, more of a blue ocean strategy to your point whenever it comes to pricing and packaging. So I’m curious, whenever you’re talking about delivery and those kinds of things, are you suggesting that we start, is it changing the way that we deliver, which I think naturally would happen, or is it also whenever it comes to packaging, are we calling out something different? I know you work with professional services companies all across the gamut, so legal services, accounting services. So dive into that a little bit for me. What does that mean in terms of from a packaging standpoint? What are we trying to be explicit with our customers about?

Shawn: Absolutely. Everyone loves a good framework, and admittedly we use a few. One that I would offer is to take service lines broadly speaking and to place them in one of four quadrants, and this is on the website. Starting at the bottom, those service lines that are exposed to the very margin compression, Adam, that you raised, those that are fully exposed, meaning there’s just certain things that are not going to be here in six to 12 months.

Adam: Like lower-end bookkeeping.

Shawn: Absolutely it is. And I say this not as a CPA, not as an accounting professional, but as a client of those services: it’s gone. I can spin up an agent in an afternoon that will do remarkable things. That’s not me. That’s how powerful the tools are. So there are those service lines that are fully exposed. There are those that are compressing, and to your point, Adam, for those who’ve had their hands on keyboard, hands on technology, enough experience as you note, I think rightly, to sometimes be disappointed, but to see the arc, where it’s going. You’ve been through this before with other technologies and you see that it is compressing. There are those that are defensible, and I would argue those are largely driven by relationships. Those are only, unfortunately in some cases, so durable, but they’re not to be trivialized. The relationships that your firm has, the brand reputation, its presence in the market, the trust ultimately that you deliver is defensible and durable, but you have to keep an eye on it. And then there’s emerging: what are the things that we can now do that we couldn’t do before, or couldn’t do profitably? To get more concrete, I think it’s the Karbon 2026 report that came out relatively recently, and it looks at a number of these services. I’ll speak to one particular client that we have, an accounting firm that has recently gone through mergers and has now candidly been caught in a situation where they’ve combined forces, they’ve gone through a merger exercise, and are realizing that the talent they brought together is largely junior and is very much exposed. So the work that we’re doing is now mapping the degree and the amount of daily activity that drives the outcomes that the clients buy that are juniors, and looking at two things: one, how many of those juniors can be upskilled and upleveled, and how many may not and therefore will be, frankly, automated away. And then what’s left is this packaging exercise that says where we think we have depth from client relationships and past experience and success, and where we see that arc of technology going, we’ve got some durable offers. We’ve got, coming back to CAS, we’ve got virtual CFO. So much of this is about advisory. To bring it back home, I will say, to look at advisory as an example, it is one thing to put a fixed price on advisory. It’s another to go through, which I appreciate is difficult, the harrowing exercise of saying we’re not just going to put the label advisory on it and put a fixed price on it. We’re going to name what the outcomes are. We’re going to put a price on the outcome. And that ultimately, I think, is the work, to your point, Adam, though it was a bit laboring to get there, of the packaging: to take this bucket of stuff called advisory and to break it out into specific outcomes, and then work backwards to see all of the activity that drives toward that outcome.

Adam: Yeah. So advisory versus consulting. Help me understand. There’s outcome-based stuff where it’s like I’m working on a project. To me that’s consulting. The way I broadly, and this is just my own mental way to break it down, I consider consulting with an expiration date. I’m going to go in, solve a problem, I’m going to sell an outcome that’s going to be a deliverable, and I’m going to walk. Whereas advisory is more relationship driven and it’s more of like I’m on call and I can do these things. And now I still think that we do a good job walking through our value proposition on what those outcomes are of having somebody like us in your corner that knows your information, that can help you make real-time decisions, provide financial clarity, those kinds of things. So we try to call those out. I don’t know that we necessarily do that on our pricing and package. We try to demonstrate that in our sales process, like our sales call. But you’re saying try to figure out how to even do that at a higher level, like on your website and those kinds of things, trying to call out the outcomes.

Shawn: I think that’s the direction. And as, Tom, you noted, we work across eight verticals in professional services, and so there are those that are in certainly different positions as goes the vulnerability to the compression of the billable hour. But to your point, Adam, we can take lessons from other fields, other sectors. To answer your question, appreciating that it’s difficult: yes, can you name an outcome. The other thing I would say with regard to advisory is I do appreciate that often that translates to retainer, and you are paying to have access. It’s often difficult, I’ve been there, it’s difficult to allocate the amount of a given senior person’s time who would be called an adviser. But you’re paying for access to time, or rather expertise. One of the litmus tests that I think is useful, the way advisory is changing and I’m seeing this, is do you have what is necessary, counterintuitively, that a junior could execute some of those same outcomes? Do they have a playbook? And so if it is only the senior-most people in the firm that can deliver that, which I appreciate has been historically true, then really I think we’ve relocated some of the same problems, which is that there’s the pyramid. The juniors at the bottom make the seniors at the top able to deliver what they are. But as the margin erodes, can you afford the juniors? And so then that trickles upward. Ultimately, as I say, I think the litmus test is could a junior, or maybe a mid-career professional, are they equipped with the playbooks, the data, the capabilities ultimately through things like an agent, to deliver those outcomes. So the too-long-didn’t-read version of that is how far down that expertise pyramid can advisory be delivered. And if it is only the senior-most, then I think that is an indication of some exposure to some of the compression that we’ve been talking about.

Adam: Well, so let me ask you about that, because we’ve long believed that we can create a playbook and a process, and we create the tools to be able to supplement people to a certain degree. We’ve done it with our playbook, and now I do think that AI and stuff like that is going to help augment as well and make us better, smarter, faster, so that more junior people can deliver some of that stuff. But our futurist that we mentioned a couple times on here, she’s like, hey, when knowledge becomes abundant, trust becomes scarce. So people are flipping. Whenever she says knowledge is abundant, the client already has the knowledge. Before, we had to take data and turn it into information. Everybody’s like, woo, that’s crazy, now we have information. Then we turn information into insights, like, hey, let me show you how you’re supposed to look at this. Now all that stuff’s being done for them. And so now it feels like the one thing that AI can’t do right now is go lay the plumbing in your house.

Shawn: Absolutely.

Adam: So we have to help them implement. I think now we’ve got to move from insights to action. And so I guess my question is, when it comes to the value chain, before it was always a pyramid, expert on top and then we try to get as many humans as we can underneath it. But now it feels like it’s going to be a diamond. So my question is, can we layer up middle-of-the-road folks and make them experts? I think the answer is somewhat yes, we can lift those people up. But it feels like we’re going to be having to sell expertise, now wisdom. And it’s hard to do that with, frankly, a kid that’s 25 years old that didn’t even go through the hard knocks of having to figure it out and is just managing the technology. So we’re going to have to reinvent how we, and we’re talking about this now, like training. We’re going to have to do more simulations, like flight simulations. We’re going to have to do that with real-time problems or whatever. But we really are talking about expertise. So how do you position that whenever, in our world, you go from being an accountant to a senior to a controller to a CFO? How do I put a 50-year-old, very successful business person that’s been running their business for 25 years, and I drop a 25-year-old in that seat and say, now let me give you all my wisdom. Hey, Mom, can you turn it down upstairs? I’m still in the basement.

Shawn: I take your point, and again, I don’t trivialize the challenge of getting there. The point that I probably didn’t make as well as I could is the unbundling, or breaking apart, of what does advisory mean. How much of that is I get to call Adam on a Friday at 5:00 PM and he will pick up, because I paid the premium for that privilege? How much of it is, in the world of a virtual CFO, access to the outcomes? And so, you can pull me back from the edge here, but to talk tools for a minute, there are three layers to look at. There’s context, skills, and agents. It is sort of a new pyramid. And context, as you perhaps are already working through, is how do you capture, document standard operating procedures, data sources, back to your own accounting and billing systems. So for example you can now begin to track the actual inputs and the costs of those to an output. What did it take to close the books in actuality, not just hours contributed by various folks on the pyramid. That is all to say that this context layer, and I’m seeing this with clients and other firms, that connective tissue gets plugged into Slack. It gets plugged into Microsoft Teams. It gets plugged in all over the place. And then this is one of the bits of real power, and it goes to your earlier point, Adam, about some of the disappointments with regard to efficiency: you’re taking these standard operating procedures, these solution blueprints, workflows, whatever terms we use, and you’re baking them into skills, and then you’re running workflows, agents, that for some will sound like science fiction and for some have perhaps already built this themselves. They’re running the playbooks. They pop into Slack, for example, or Microsoft Teams, and they ping that mid-tier, I hate to qualify people this way, but that not-junior, that middle individual, and they’ve got three-quarters of the work done, because that’s baked into the context and it’s encoded in these skills and these workflows. And it may then coach that individual to say, look, you need to go to Tom for the final call on this. This is not science fiction. I’m seeing it happen. So that is a lot to say that I think the trajectory that we’re on will uplevel those individuals. But I fully take your point. Sitting across the table from a graybeard and being 22 is never not going to be an awkward conversation if you’re trying to deliver something that is predicated on trust and depth and pattern recognition. But again I will assert that as much of advisory actually comes down to outputs and outcomes. I think we’re seeing that shift right now.

Adam: But a lot of times the outcome in an advisory relationship, and maybe this is where we’ve got to get better, is helping connect them to the actual outcome. A lot of time it’s pointing them to the right outcome, giving them the advice toward the outcome.

Shawn: You’re pointing to the moon.

Adam: Yeah. And I think we do have to figure out a way to then not only point to it, but grab them and take them there. That’s the missing piece that we’ve got to somehow figure out as a profession, because we’re no longer going to be able to just sit back. It used to be that we would just answer questions. Then we’ve shifted to a true advisor where we’re asking questions and we’re being more thoughtful about their business.

Shawn: But now they can chatbot back and forth with themselves all night long.

Adam: And get down to where they feel like they have a solid solution.

Shawn: Which by the way can be in error.

Adam: Oh, yeah. A thousand percent. And trust me, they’re coming to us and saying, hey, I’ve already talked to myself for four hours and this is what I came up with. And you’re like, well, kind of. So there’s still a little bit of that right now. But then there’s still, cool, is that agent then going to make it happen for you? Somebody still has to be able to make it happen. So I guess the question is, especially in a virtual environment, how can we think about how we can help deliver those things for clients? I think that’s really going to be our next test, because we’re going to have to do more than sketch out the outcome and point them in the right direction. I feel like we’re going to have to take them there next.

Shawn: Well, another thing I would offer, and it is much of the crux of the work that Upshift is about, is borrowed from now almost 20 years of discipline in the tech industry. So for yourselves or for your audience who either work with or have worked in tech startups, they’ll be familiar with this process of so-called product market fit. At the risk of repeating for those who don’t know, for the longest time, and that’s my career, always in technology, there was the so-called waterfall methodology. I’ll try to keep this brief, but the idea is you have an idea, you hand it to a bunch of engineers, you build the thing, you go hire sales and marketing people, you bring up the budget and you force it into the market and hope for the best. That’s an unfair retelling of history, but that is effectively the way. And so 15, 20 years ago, closer to 15 perhaps, is this so-called lean startup approach. What this did is it inverted the entire process and said we will not take the field of dreams approach, build it and hope they come. We will learn in a very disciplined, precise way what the existing pains and problems are, how pronounced they are. What is the market’s proclivity to pay to solve it? Is it an annoyance or is it actually a needle in my thumb that I need to remove? And then only once we think we’ve understood the problem do we propose a solution. That is all to say that a lot of our work, and it goes to your point, Adam, is not to say I know what the package should look like. In fact, I’m certain I don’t, to the degree that anyone in your field does. But to go through a process of rapid specification of what would your client base, and perhaps others in the market, respond positively to, desire, and ultimately pay for. So the good news, I think, again obvious to some, is you don’t have to make these changes and hope for the best. There are ways in which, particularly as we talk about productized services, there are fantastic existing disciplines and bodies of knowledge for going from I’ve got a hunch to I’ve validated this in the market, with a service design, packaging, pricing, and the first 30 to 90 days of client conversations to have before, and this is key, before we go invest half a million dollars in capital to build that agent, to build that automation, to build that new product.

Tom: And Shawn, I would guess as you describe that, and I love that approach, this is likely a very repetitive approach. Is that, I do this, kind of worked, okay, let me try, test on something else or revise that.

Shawn: Yes.

Tom: So not a one-time thing.

Adam: Yeah. And I’m a big fan of, and I believe this is what we’ve done, what you’re saying, your approach is what we’ve done in the CFO practice. We’ve identified pretty across the board, industry agnostic, there’s three or four pain points that most SMB businesses have, the zero to $50 million in revenue. I think we’ve created solutions for them. We identify them as services rather than the outcomes, but we explain the outcome whenever we call out the service, and we’ve done those things. But as you start to move up market, or you’re talking to other businesses, are you still suggesting regardless it’s not one of these consulting things anymore where you just kind of go in and say, what I’m going to do is I’m just going to go in and find where the problem is?

Shawn: The discovery phase.

Adam: Yeah, right. So you’re saying rather than do that, in this market, because we have such short attention spans, we have this technology now, we’re going to have to be more thoughtful about what we were talking about, which is we really need to focus on learning the problems first and then having a solution to be able to show the outcomes of what we can do in those areas, rather than the other way around.

Shawn: And again, I appreciate the anxiety-inducing part of this. It is one thing for me to say, though I believe deeply that it is true, that we’re in an age of going from trawling with a net to spearfishing. And so consulting, having been there from Accenture to my own practices, I appreciate it is great to cast a wide net and then to see what you can drag in, and I would fault no one for that. That is a very natural and time-honored approach. I think once again AI is forcing this decision point where, as I mentioned, the anxiety-inducing part is what are the two or three packaged offers, outcomes, that we’re willing to effectively bet the firm on. And it doesn’t happen overnight. I’ve got a client that’s spinning up a new P&L to do some of these experiments rather than put it under the roof of their firm proper, so there is a sensible way to graduate, or rather transition. But that is all to come back and say I think we find ourselves in places where we’re going to need to do that work to define those offerings that will be what the firm sells, which will be painful in the sense that we may feel like we’re turning away or turning down business. But I think it’s what, on the other end of this AI transformation, survives. Because your clients are buying the same tools, your competitors are buying the same tools, and so merely offering this vague category of services becomes a very difficult position to hold and to defend.

Adam: But I think we’re also talking about the difference between marketing and what you have the ability to do. So you can still do those other things. That’s just not going to be your go-to-market strategy. From a go-to-market strategy, you really have to be pretty narrow, and what you’re saying is these are the three outcomes I deliver. And then of course, if they need things that have tentacles that spin off, you can still do those things. So what we’re talking about really is getting laser focused from a market standpoint.

Shawn: And why wouldn’t you, Adam? Why wouldn’t you continue to offer and bill, perhaps not by the hour, but to capture that revenue for as long as you can? I was reading a piece in the legal field just this morning that hiring in law is on the upswing and that, as this individual noted, NBA-player-level signing bonuses for some of these lawyers. So I raise that to indicate that for as long as a firm has either the market demand, or perhaps has the brand or the partner equity, to go command and capture that, of course I’d be foolish, reckless, to say, not that I expect you to listen to me, that you shouldn’t do that. But I think for most of us mortals, we’ll find ourselves in a place of commoditization and a collapsing competitive position, and need to be the firm that you go to for X, Y, and Z, not the firm you go to for accounting.

Adam: Yeah, no, it makes sense. What about as you think about that blue ocean strategy, and maybe you have an example in legal that we can think through for accounting or whatever. What are some more of the creative ways that we can start thinking about doing things a little outside? Have you seen anything where we can do things just a little bit different and create more space from everybody else?

Shawn: Yeah. And stop me if this is obvious, but there are patterns that I’m seeing emerging in accounting and elsewhere where it is not engagement specific or end-of-quarter, end-of-year specific. It is always on. Easy to say, harder to build, but very buildable. I’m in projects where the client is building this agent that, as you drop new documents in, anything from receipts to W-2s to a K-1 that comes in. And so there is no pull. There is no follow-up email, Tom, please send me that attachment. There is a Dropbox or other mechanism whereby I just drop documents. It ingests them. It updates the compliance position or otherwise. So again, maybe obvious to some, but what does that look like? It’s a subscription. It is not a quarterly, annual package. It is an always-on subscription. And so in this one particular case I’m thinking of, a firm who has a client that has four LLCs and an IRS notice is going to take a different position to the care and attention they pay to their overall compliance posture than would someone else.

Adam: Okay, yeah, no, that makes sense. So would you even, on the marketing front, would you position it like AI driven, human managed? Or are you suggesting even within the outcome, do you go ahead and call out, is there some kind of competitive advantage to say on the surface, yeah, we’re using this technology, we’re doing these things?

Shawn: Good question. I think it cuts both ways. In some cases, depending on your client base, there’s a lot of fear and misunderstanding about AI and what that means. Does it mean that Anders has turned its clients over to a bunch of chatbots and you guys are out on a holiday somewhere? Which of course is not the case. You’re probably putting in more hours than you ever have. So I think that’s a positioning question, to your point, Adam, to reflect on your client base. If it’s a bunch of startups versus a bunch of 50-plus year olds, that’s a very different conversation. There may be a window. I think that window will shrink rapidly, and I make this comparison often, it’ll be back at, for those of us who knew what it was like to be forbidden from bringing a smartphone into the workplace because that wasn’t an IT-anointed device. I think we’re going to see some of those same patterns play out. But I think what is more pronounced, and I think sets one apart as a firm, is the ability to put forward an offer. And I’m not saying it’s all outcome based. There’s a ladder that I talk about, that as you climb that ladder the confidence and the reputation, which of course is everything, that you can deliver that outcome predictably at a fixed price speaks volumes. Now, let’s face it, sometimes you end up eating some margin on the back end, because you’re pulling the levers behind the scenes before you can fully automate the process. But I think the short answer to that question is the AI label could cut both ways, and even in the situations where it’s positive, there’s a shelf life on it. I think the bigger differentiator is how you promote what you offer, and price predictability.

Adam: Makes sense.

Tom: Shawn, if we can talk a little bit about how your firm does this. What I read, you will work with the leadership teams and say, okay, this is the direction you’re going. How could that look for an organization? Because I’m thinking of that along with this lean approach. That tells me, hey, in a couple days you’re probably not 100% done. Maybe you are. So what would that look like? I’ll stop trying to guess what it is.

Shawn: No, you bet. And thank you for that, Tom. So there is an assessment on the site, free, and the point of that assessment is per vertical to look at the service lines that are predominant, the delivery models that are predominant, how much of that is junior and therefore could be automated without senior oversight. There’s a series of questions, takes about eight minutes, and at the end of it you get an overall score and a position, and then your level across a few of these characteristics, and ultimately what might the first two or three steps be to take. And then there is also a mapping exercise whereby in a couple of hours we will do what I mentioned earlier, which is to map the service lines in these four quadrants, and you come away with, okay, here’s our position, here’s where Monday we should start evaluating and looking at last quarter’s billables. Is it shrinking, or to the point that Adam made, maybe business is booming even though we see in three or four quarters that will change. And then the workshop is a two-day exercise, one on site with the leadership team, to go through this sideways pyramid, if you will, where we put it all on the table. We map all the service lines, all the lines of business. We look at those that are most exposed, those that are most defensible. And then for either closing the gap on what we think will shrink or go away, or opening up whole new service lines, we put eight to 15 ideas out there and we narrow down to two or three. And then what is that? It means here is a brief that is delivered, eight to 12 pages on average, that maps the whole service, that packages it, prices it, looks at the premortem: why would this fail? And ultimately delivers what leadership and/or business development and sales will take to your clients over the next 30 days, to rapidly have the conversations that validate or invalidate that these are offers we should take to market. Optionally, we’ll help clients get to that first dollar of revenue for that new offering. But really at the crux of it is how do we go from knowing we should do something to what we can start doing on Monday, to both defend against and grow with what AI is doing to the billable hour and professional services broadly.

Tom: Okay, if I tried to use an example, tell me if this would work and tell me if it’s a bad example. We have this leadership team and we say it looks like helping people do exit planning from a company is an opportunity. We think we’ve got expertise. We think that’s where it’s going. We write our eight to 12 page thing. There’s then, I assume, a follow-up date to say, okay, then by this time Adam has a responsibility to come back and test all these things out and come back and say, is this matching?

Shawn: It is. And it is so often, one of the things I will always point out is, and the questions that you might imagine, how in two days are you going to become an expert in forensic accounting or M&A law? I’m not. And so the work is to take the expertise that the firm leadership has with the commercialization expertise that we have, and to work through this facilitated process. But to your point, Tom, I think the value is in going from we know we need to do something but we’re billable, to let’s get in that room, in that day, work through it all. And you nailed it, Adam’s now on the hook. These are the first three calls to clients he’s going to make. This is the research that we’re going to do. And then in 30 days we’re going to regroup within the firm, optionally with help, but we’re going to regroup and evaluate what we learned about these proposed offerings. Are we going to go forward? Do we test them with clients? Or do we say, look, these are not the ones, we’re going to iterate and bring two to three more to market.

Tom: Yeah, I really like this, and I think you’re supporting, I was at a conference called Build a Better Agency recently. One of the client niches we have is agencies. Agency Edge did a research project, and one of the things that they brought up I thought was interesting is they said, hey, when we surveyed all of you agency owners, we asked you to say, can you name the strategy that you think would solve your agency’s biggest problem. And 57% of the people filled in an answer to say this would solve the problem, and then they said but 17% of you said you’re actually implementing that strategy.

Shawn: Right. It goes back in the drawer next quarter, it goes back in the drawer the quarter after.

Tom: Exactly. And part of me thought, okay, people are busy, they don’t do that. But I think there is a big part of saying I think it’s that strategy, but I’m not sure I have a way of validating that strategy before, in some cases, taking the risk to move that direction.

Shawn: To do that. Truly the reason, the greatest friction against the growth of my business is not the price. It is taking four or five senior people in a room for a day and taking them off client work. And so I’m completely appreciative of that. And I think if one sees where these things are going, there is, by the way, a calculator on the website where per vertical you can drop in your annual revenue, and backed by a great deal of research it’s going to tell you what the compression is going to look like, what’s going to come off the books probably in the next year. So the point there, of course, is to say, is it pronounced enough to fix now, or maybe do we have six months of all-time highs before our clients catch up? And I think that’s the real driver, is the clients are and will catch up as to what they’re able to do without the firm.

Tom: How would you respond to another thing at a conference that Adam and I went to? There were multiple people saying maybe being a fast follower with some of these AI tools is a smart approach. I feel like there’s a risk in there, because it could have people saying I’m not sure I need to do anything right now, versus maybe what they were saying. I’m curious how you would react to that.

Shawn: I think it’s a great point, and it is why, being someone who is deeply technical and builds with these tools so that I am firsthand competent, there’s a few things. Back to your point, don’t get married to one of these models. I think it is outsourcing the future of your firm, and we’re seeing this in many industries. So in terms of tool selection, the real value, I think, is going through the exercise, and I’ll come back to it. What is the context? What is the brain of the firm? Where does it live? Is it scattered across three different back office systems? Have we perhaps already built standard operating procedures? Do we have solution blueprints? All these things. And so much of it is the reckoning of it lives in senior people’s heads. That’s where the context is. And so to differing degrees, firms will have gone through that process of getting it out, so that when Tom and Adam, you guys wander off to the beach and decide it’s time, the firm isn’t scrambling to document it. Again, somewhat obvious, but it is hyper accelerated with AI. So the context layer is critical. The model and the tooling, I would argue, is very secondary. And then the automation that you build on top of it is key. So there’s two ways to look at that. Can you afford to ignore it? No. And I rarely offer definitive statements like that, but absolutely not. Now, if you’re five years from retirement, selling the firm, if you’re looking to PE to roll up, your multiple, by the way. I just had a conversation this morning with a private equity sponsor about that. Firms are already being sorted into two buckets. So the moderate case is you’ve got two or three years, you’re going to sell, I’ll be okay. Sure, to a degree you will. But if you’re still in the game for some period of time, this will be a competency that one cannot ignore. But as I say, the backside of that is don’t worry so much about tool selection so much as readying the firm to drive these automations, and that’s where the force multiplier is.

Adam: Yeah, because that’s the problem, is the tool selection is just so vast and it’s just changing.

Shawn: Next week you’ll have another option.

Adam: But I do think it is important to get yourself familiar with the technology in general. The shell can change and what it can do, but people have to get super comfortable with it. So whether it’s playing around with Claude or Copilot or ChatGPT on a regular basis and really using that as much as possible, even just doing that, and getting used to that no-code response building stuff, is really important for everybody.

Shawn: Yeah. Because until you’ve experienced the beauty and the horror, and I say that tongue in cheek. The beauty is these magic moments where you see firsthand what’s possible. It’s a great deal more pronounced, I think, than the first time any of us probably had a conversation with Alexa or Siri. But that was a magic moment at the time, and so 10x, 100x that now for AI. But likewise, to know what the limitations are. And I think in many cases to gain some comfort that if you have depth of expertise, if you have experience, if you’ve built yourself in a high-integrity way in your firm, as much that you’ve got these relationships and this trust that you’ve earned, you’re going to be just fine. In fact, you’re going to be great, because you’re going to have the force multiplier of all this technology. But the technology alone won’t be enough.

Adam: Yeah. Just bringing that full circle then for everybody, as a good recap. What would you say, if there’s one big takeaway here that people should be focusing on and pull away from this conversation, can you boil it down to a recap here?

Shawn: Yes. I think ultimately the question is, and it is a shamelessly capitalistic, commercial lens, but it is what can you sell after AI. That to me is, if we were going to prompt engineer ourselves, it is what can we sell after AI. It’s purposely a big, broad question, and I think it invites a number of other questions. It does go back to assuming you have some fluency in what’s possible. But it’s not just can we cut some headcount. It’s not just can we do this faster and still get away with billing the same number of hours for the next two or three quarters. It is what can we do, because I guarantee you in the heads of the senior team there are some crazy brilliant ideas that you didn’t have the capital to hire to deliver on, you didn’t have the technology budget to deliver on, you didn’t have the IT staff to deliver on, that can now be made possible. So I think that’s the one driving question: what can we sell after AI.

Tom: That is a great summary. Well, Shawn, this is great. I’m really hoping that people will reach out to you, as I did research for this. You’ve got some great information on your site, including, as you mentioned, there’s a what about accounting firms, and so you can get specific to that. People can look you up at upshiftco.com.

Shawn: That is it.

Tom: But also, I would hope that they would reach out and learn from what you’ve done, because it does look like you’ve got a really good solution for them.

Shawn: And I know, and thank you for that, Tom and Adam. I’m grateful. Sincerely, zero obligation. I just love having these conversations. The reason I didn’t tuck in at Microsoft for 25 years, love Microsoft, is because I’m more obsessed with learning. And so I invite, find me on LinkedIn, you’ll see that on the website, shoot me an email. Would be delighted to have a chat, and no other obligation or expectation than that.

Tom: That sounds fantastic. Well, thank you again. We really enjoyed the conversation.

Shawn: Thank you guys. My pleasure.