Beyond Market Hype, how should AI be implemented in professional services?

Akber Datoo is a legal technology specialist, graduating with first class honours in Computer Science from Cambridge, before qualifying as a lawyer with Allen & Overy LLP. He was recognised as among the top 10 market shapers in the 2019 Financial Times Intelligent Business Awards. Datoo leads D2 Legal Technology and is a visiting Professor at the University of Surrey.

There has been widespread debate regarding the impact of AI on various aspects of society, from its effects on employment to education and beyond. However, one significant consequence that often goes overlooked is the impact on the established professional services sector. The UK is recognised as the global pioneer of the services industry, yet the disruptive nature of AI has the potential to distort this landscape and alter the sector’s rosy image into the future, for better or for worse.

According to Microsoft and LinkedIn’s Work Trend Index, 75% of “knowledge workers” now use AI in their day to day activities. However, only a fraction of this use appears to be moderated by the employer, with the survey discovering that 78% of these individuals bring their own AI tools to work. Workers perceive that AI is simple to use and makes life easier. Many employees are, quite simply, intrigued by the possibilities generative AI can offer. However, the majority have limited understanding of how the technology works or, critically, the risks associated with it. Many workers consider their use of free AI tools as no more than fact checking, or perhaps playing around with new technology to see how it works. However, such individuals dangerously fail to consider issues like copyright infringement, and often have limited awareness of the continued struggles associated with AI hallucinations, AI drift or the lack of AI training data. In many cases, AI users do not consider the ethical issues surrounding AI, and innocently see it unnecessary to inform customers or business partners of their use of the technology in the workplace. The consequences of these oversights are mounting, with far reaching consequences that can no longer be ignored.

In many cases, intelligent, motivated white-collar workers don’t see the issues associated with AI usage because employers provide no clear guidance about how, when or where the technology should be used. Some firms have opted for a draconian “do not use” order, whilst other companies continue to ignore the issue. As such, this discrepancy will lead to the inevitable result that is the surreptitious exploration of AI from employees’ own devices and personal accounts. Whilst it may be tempting, business leaders cannot sit back and wait for the AI “hype” to die down. Individuals are embracing AI, and they require guidance. One of the most concerning issues is that small firms are the furthest behind. According to the Solicitor’s Regulation Authority (SRA), around
75% of the UK’s largest law firms are using AI, and more than 60% of large law firms are actively exploring the potential of the new generative systems. In contrast, just 30% of small law firms in the
UK are exploring generative AI systems. This stark disparity highlights a critical gap in the professional services industry, and these small firms’ risk being left behind not only in terms of technological advancement but also in competitiveness and client service.

This empirical data analysis contradicts the typical economic theory surrounding the issue. In theory, AI should allow business leaders with fewer resources to be more productive, to innovate and create new business models. But, while it is inevitable that the biggest companies have the ability, the resources and the money to explore AI, smaller companies seem to be pushing aside the vast potential of this definitive technology. There is a very real risk that smaller companies’ lack of willingness, capacity and funding to consider AI will lead to a massive lost opportunity for levelling up. Without the right approach or attitude, AI will exacerbate the already growing divide.

Despite the rather gloomy portrait painted so far, the opportunities associated with AI have not yet been lost completely. Currently, professional services companies that have embraced AI are primarily focused on streamlining existing processes to reduce costs. Activities such as automating anti-money laundering (AML) checks, searching for information to support document discovery, automating the generation of letters and contracts and summarising information from client meetings are useful but not innovative. The real potential of AI will lie not in cost cutting activities but in creating new business models that are truly transformative – models that will not be envisaged until AI understanding and confidence becomes far more widespread. It is, however, important to recognise that these autonomous activities, whilst basic, still need to be scrutinised and considered. Is the business using Zoom AI or Otter AI to transcribe client meetings? Are clients being informed that AI is being used? Are the legal implications being considered? With software vendors increasingly adding elements of AI into their products, companies need to assess the implications of adopting such technology. Firms need to offer employees clear guidance on the appropriate use of these technologies, including how, when, and where to implement them, while also addressing any unauthorized or unmonitored AI activity. Ultimately, a proactive approach to AI implementation will not only safeguard client interests but also ensure compliance with legal and ethical standards in an evolving technological landscape.

It is crucial that business leaders use this time to develop a strategy, build skills and determine how to change business models to maximise the potential of AI. With large companies forging ahead in developing expertise and confidence, it is incredibly important that small companies take this opportunity to gain a firm understanding of AI, where it is going and what it will mean for professional services providers. This doesn’t necessarily mean adopting AI. Indeed, once a company has gained a true understanding of the technology, the opportunities and the risks, the decision may be taken to hold off until some of the legal and operational concerns are addressed. This will, however, be an informed decision rather than the “head in the sand” attitude affecting many professional services firms.

It is essential for businesses to be proactive, to embrace this change and take control over their own AI adoption and strategy, rather than taking the risk of undercover, unmanaged AI usage. By upskilling and training, companies can build the knowledge and understanding to confidently assess the potential of AI and adopt transformative innovation when the time is right. Embracing this mindset will not only position firms to thrive in an AI-driven landscape, but also empower them to lead the way in shaping ethical and responsible AI practices within industry.

Edited by Jabir Dhalla.