AI and the End of Billable Hours

The public relations industry is undergoing a fundamental shift, driven by the rapid rise of AI-powered tools that automate and accelerate many core functions of agency work. In our recent FIR Interviews podcast, Steve Rubel – a pioneer in digital communication – shared his perspective on how AI is challenging traditional agency business models, particularly the reliance on billable hours.

One of the biggest forces driving this change is the proliferation of enterprise-grade AI tools like Microsoft Copilot, Google Gemini, and ChatGPT Enterprise. These technologies streamline research, automate reporting, and generate strategic recommendations at unprecedented speeds.

In doing so, they raise a fundamental question: If AI can accomplish in minutes what once took hours, how do agencies justify the same billing structures?

Why the Billable Hours Model Is Under Pressure

For decades, PR agencies have billed clients based on time spent, whether through hourly fees or retainers calculated against projected hours of work. But as AI automates tasks like media monitoring, content drafting, and sentiment analysis, the foundation of this pricing structure is becoming increasingly fragile.

This mirrors similar transformations in law firms and management consulting, where AI is prompting firms to reconsider flat fees, subscriptions, and value-based billing models instead of hourly rates. As I noted in my own May 2024 article on this topic, AI’s ability to accelerate work and generate insights faster means that clients are less willing to pay for time – they want to pay for outcomes and strategic value.

The Shift to Value-Based Pricing

Rather than billing for hours spent, PR agencies will need to charge for the results and insights they deliver. AI allows professionals to spend less time on manual tasks and more time on strategic thinking, relationship-building, and reputation management—the areas where human expertise is irreplaceable.

To make this transition successfully, agencies should:

Reevaluate Service Offerings – Identify which tasks can be enhanced by AI versus those that require human expertise and storytelling.
Reskill PR Teams – Invest in training so professionals can leverage AI effectively while focusing on high-value client strategy.
Communicate AI’s Value – Position AI not as a cost-cutting tool but as a means of delivering better, faster, and more strategic outcomes for clients.

By shifting towards value-based pricing, agencies can align their revenue model with the true impact they create, rather than the hours worked.

AI as an Enhancer, Not a Replacement

Despite the disruption AI brings, Steve Rubel remains optimistic about the future of PR agencies. AI is not a substitute for PR professionals – it’s a force multiplier, he says. While AI can analyse media trends, detect patterns, and optimise content, it still requires human intelligence to interpret, contextualise, and act on these insights. That’s a significant value-add for PR.

The PR professionals and agencies who will thrive in this new era are those who embrace AI as an augmentation tool rather than resist its impact. As Steve pointed out, the firms that will succeed are the ones that reinvent their business models and focus on strategic advisory roles rather than commoditised execution work.

Agentic AI: The Next Disruptor for PR Business Models

While today’s AI tools largely operate as assistants – responding to prompts and automating specific tasks – the next wave of AI, often called “agen t ic AI,” will go much further. Instead of simply following commands, AI agents will proactively execute tasks, make autonomous decisions, and optimise workflows without constant human input.

In FIR podcast 439, Shel Holtz and I explored this concept in detail, and I later expanded on it in my December 2024 post: “The Future of Work: Exploring Agentic AI”.

The implications for PR and traditional business models are profound. If AI agents can independently conduct media research, generate insights, refine messaging, and even draft full-scale PR strategies, how does that reshape the role of agencies and consultants?

This is a step beyond mere automation. AI will no longer just accelerate existing workflows – it will redefine them entirely. The shift from billable hours to value-based pricing will become even more urgent as PR professionals move away from charging for time spent and instead focus on strategic oversight, creativity, and the ability to validate and enhance AI-driven recommendations.

Rather than seeing this as a threat, PR agencies must position themselves as curators and strategists who can guide AI-driven processes while ensuring relevance, ethics, and human insight remain at the core of communication strategies.

The Future of PR Agencies in an AI-Driven World

AI isn’t replacing PR, it’s evolving it. The challenge now is how agencies and communication teams choose to evolve with it. Agencies that cling to traditional pricing models may struggle, while those that embrace AI-driven efficiency and redefine their value proposition will be well-positioned for long-term success.

The billable hour may not disappear overnight, but the era of AI demands a rethinking of how PR agencies and consultants define and charge for value. Those that move beyond billable hours will not only survive but thrive in the AI-driven future of PR.

Listen to the FIR Interview

During the 40-minute conversation with Shel and me, Steve Rubel shared his thoughts and insights on a wide range of other areas that impact public relations, including the role of AI in modern communication, how AI is reshaping media intelligence and PR strategy, and why earned media remains the bedrock of communication and how to break through.

You can listen to or download the conversation right here; or, if you don’t see the embedded audio player below, listen with your favourite podcast app or on the interview show notes page on the podcast website.