This article focuses on Law Firms, but I imagine that Accounting Firms will be feeling the same pressure to change their pricing model from “billable hours” to other ways of charging for their services.  That doesn’t mean that there still can’t be a profit margin factored in, of course, but it will mean that people that want to charge so much for certain types of services will need to really understand what their costs are so that they aren’t surprised at the end of the month/quarter/year to find out that they didn’t charge enough.  For example, it will be imperative that things like fixed costs and variable costs are well understood.

With the recession crimping legal budgets, some big companies are fighting back against law firms’ longstanding practice of billing them by the hour.

The companies are ditching the hourly structure — which critics complain offers law firms an incentive to rack up bigger bills — in favor of flat-fee contracts. One survey found an increase of more than 50% this year in corporate spending on alternatives to the traditional hourly-fee model.

‘Billable Hour’ Under Attack — In Recession, Companies Push Law Firms for Flat-Fee Contracts. Nathan Koppel, Ashby Jones. Wall Street Journal. (Eastern edition). New York, N.Y.: Aug 24, 2009. pg. A.1

An earlier item from the Journal of Accountancy referred to the practice in CPA Firms as “Value Pricing” in a similar context: