Billable hours are giving way to value-based pricing: Eisner’s Charles Weinstein

As the Big Four expand beyond traditional audit into higher-margin advisory services, mid-tier global firms are carving out their own niches. US-based Eisner Advisory Group LLC, which positions itself as one of the largest assurance providers outside the Big Four, is betting on cybersecurity, internal audit, and cross-border tax advisory for Indian startups expanding into the US. Its global capability centre (GCC) in India generates 23% of global revenue.

In an interview, chief executive Charles Weinstein also spoke to Mint about reverse listings, the firm’s rollout of 11 homegrown AI tools for assurance, and why the billing model of professional services is headed for a radical change.

The Big Four are moving from pure-play audit into advisory, and homegrown firms are doing the same. How is the competition shaping up?

The advisory areas where we are growing, and where we need additional capacity and talent, are cybersecurity and internal audit. Financial audit is a mature market, but there is an opportunity to grow other forms of assurance around privacy, data security, AI controls and operating controls. From the assurance side, this will require people with tremendous expertise.

You are largely a GCC player in India. Which part of the GCC business are you betting on from India for your US clients?

The India GCC accounts for 23% of our global revenue. We made a concerted effort to grow our tax advisory practice, driven by startups built in India that develop products for the US market. We have created a ‘Going to America’ programme for the founders of these companies to tap into cross-border tax services.

If you’re a startup and you’ve only made $5 million, you’re not ready to hire PwC or EY and spend half a million dollars of that on tax structuring. Our team of tax advisors, who are trained in US taxation, can help you break it down.

What work on family offices and listings is being done from India, given that this is another focus area for the Big Four?

There is a lot of reverse IPO listing work being done. The Anthropic listing, for instance, is expected to take away a lot of liquidity from the market. Several clients approaching us are US startups with significant run rates. They may have an Indian founder, one of the founders may be Indian, or one of the investors may be a venture capital (VC) firm that has some connection to India. They want to know whether they should wait to go public or look at a listing in India. There is still money here, and the Indian market is still evolving.

Most of the Big Four have mammoth GCCs. Does this leave any space for mid-tier firms like yours?

It is an opportunity for us because, when we need talent, the Big Four have created a whole ecosystem — almost like a university for talent. Even though it may be dominated by the large companies, it leaves tremendous opportunities for mid-market companies such as ours.

While the Goliaths of the business world have faced AI-related issues with clients, how are you, with a fraction of their team size, implementing guardrails?

We have deployed 11 homegrown AI tools firm-wide for assurance in just the past three months. These tools will be rolled out across thousands of audits, and we’re training our people in these skills. Outside the Big Four, we are the largest providers of assurance services, and there are not many commercial AI tools available. So, we have built specialised tools that we are now rolling out into our financial services audits.

How is the billing model changing?

It’s moving from rates and hours to subscription-based services, bundled services, output pricing and value-based pricing. Over the next 6-18 months, this is going to drive a radical evolution of professional services.

For the larger consulting firms that have thousands of people, what do they do with them? The skill sets required for foundational work will go away. But the ability to analyse, assess value and evaluate risk will continue to be extremely valuable. AI puts all kinds of numbers on a piece of paper and provides an explanation, but you don’t know whether that explanation is right because AI is only as good as what you feed it.