AI in Business: Trends in Audit, Consulting, Legal and Other Professional Services

Why is AI important in professional services?

The emergence of artificial intelligence (AI) is revolutionising industries across the globe, and the professional services sector is no exception.

When it comes to professional services, providers are constantly striving to maximise value for clients to grow their reputation and foster long-lasting relationships.

For professionals working in accounting, consulting, legal, architectural and advertising businesses, AI is now another tool in the toolbox.

But new technology always comes with some growing pains.

Keep reading to learn how AI is helping the professional services sector, and find out which challenges and trends to watch for as AI continues its takeover.

AI investment across sectors

The AI boom has been staggering, with businesses around the world adapting this technology to reap enormous benefits and get ahead of competitors.

According to the International Data Corporation (IDC), global spending on AI will reach $154 billion USD (£122 billion) in 2023, up 26.9% on 2022.

Professional services rank third in value of AI investments in 2023, at 10.4%, and only behind banking and retail, according to IDC’s forecast. The professional services sector is also poised for the second-fastest growth in AI spending, just behind media.

AI business use cases – audit, consulting and legal

While auditors, consultants and law firms face their fair share of repetitive, mundane tasks, their main goals revolve around complex projects.

To free up time and energy for high-value activities, businesses are leveraging AI to automate routine tasks and assist with preliminary work for big projects.

When it comes to project execution, AI has become an indispensable tool for enhancing efficiency and accuracy, analysing data and informing decision-making. All of this can help professional service providers produce better work for their clients and drive up customer satisfaction.

On top of these benefits, AI also has the power to teach businesses more about their clients. With more insight into their customers, these service-based businesses can offer tailored solutions that foster deeper and longer-lasting relationships.

With more productivity, better insight into clients and higher accuracy, professional services get a big boost in quality.

AI in accounting and auditing

With accountants and auditors working some of the most high-integrity jobs in the professional services sector, you may be wondering how AI could possibly help.

Can AI replace accountants and auditors? No – but there are still ways for accounting and audit firms to improve their services using a host of AI tools.

To speed up processes, AI software can help automate data tasks, reduce errors and detect any anomalies in financial data. For example, KPMG’s Clara tool allows auditors to see unusual financial data patterns and detect fraudulent activity.

Major global accounting and audit firms are pouring big sums of money into AI. In April 2023, PwC announced a US$1 billion (£800 million) investment in AI development over three years, while KPMG is committing US$2 billion (£1.6 billion) in a five-year partnership with Microsoft.

In the wake of auditing and accounting scandals like the Wirecard scandal (2020), accuracy and due diligence are more important than ever. Facing a higher level of scrutiny, audit and accounting firms are keen to invest in tools that help protect their reputation and avoid further backlash that big scandals can bring.

By improving the quality of audits and reducing the number of audit failures using the help of AI, accounting firms can avoid fines while also building goodwill with clients.

AI in consulting

AI tools are particularly handy for consultants, as they rely heavily on data-driven insights to provide sound strategic decisions and more informed recommendations.

AI-based analytics tools allow consultants to gather insights, understand business trends and predict future scenarios, all of which help them establish their authority and become a trusted advisor to clients.

With AI finding its way into more and more industries, consultancies are also offering specialised AI services to help clients leverage the power of AI in their world. Take, for example, McKinsey’s QuantumBlack subsidiary, which prides itself on helping clients transform their businesses from the ground up by blending AI technology with strategic thinking.

As with other professional services, consultants’ reputations depend heavily on their ability to deliver results over a specified period of time. As they juggle a number of clients at once, AI can help streamline project management and ultimately improve timeliness.

AI in law

Similar to accounting, legal firms work with tons of paperwork and repetitive tasks. AI is used to analyse contracts, manage claims, assess risk, generate litigation outcome forecasts, perform legal research and speed up M&A due diligence.

Automating time-consuming routine practices helps eliminate human error and allows lawyers to concentrate more on higher-value activities and take on more clients without compromising quality.

When polled by Thomson Reuters in 2023, most legal professionals placed improved productivity and efficiency as the most prominent positive effects of generative AI (75% and 67%, respectively).

On top of this, more than 55% see an opportunity to boost revenue and reduce costs through AI.

But as with other professions covered in this article, litigators bring an element of human judgment to the table that cannot yet be replicated by AI. With AI algorithms often a big question mark, the role that AI plays in complex decision-making and other high-stakes aspects of litigation is somewhat limited at this time.

AI in other professional services

Other professional service industries, like advertising and architecture, leverage AI tools to achieve efficiencies. Within advertising, AI helps analyse customer data to personalise and optimise ads and ad placement, improving overall campaign performance.

Predictive analytics allows advertisers to forecast customer trends, enabling more strategic ad placements and messaging. Meanwhile, generative AI can create content, like images, for advertising campaigns.

In architecture, AI generates various design and innovation solutions based on specified parameters, leading to optimised design structures and energy-saving ideas. It can be used to generate realistic visuals and help with drafting.

However, with both of these industries requiring a good deal of creativity, the human touch remains vital.

The future of AI depends on these 4 concerns 

With AI’s benefits spanning multiple different industries, adoption is surely rising. But some professionals remain sceptical regarding AI, slowing the adoption rate.

For many of the professions discussed in this article, a code of ethics and commitment to excellence mean that extra care is needed when adopting new technology.

Some of the top concerns include:

1. Ethical issues are almost impossible to ignore when it comes to deploying AI technology that assists in making human-like judgment calls and decisions. Potential algorithmic biases could create problems with transparency and fairness that go against the values of service-based businesses.
2. Data privacy and security are at the top of the list of concerns, as AI technology accesses and analyses vast amounts of data. Some data can be personal and sensitive, like some of the information that accountants and lawyers deal with, resulting in potential issues around personal data protection, including confidentiality, privacy and misuse.
3. Some professional service providers are also wary of potential inaccuracy in data and information generated by AI software, which would be detrimental to the quality of their work and ability to make critical decisions.
4. AI’s ability to automate tasks opens up the possibility of job displacement, particularly in junior-level positions. Some paralegals or junior consultants could find their roles obsolete, posing a threat to job security and the need to retrain professionals.

The state of AI – looking ahead

Professional service giants like PwC, KPMG and Accenture have all announced billion-dollar investments in AI. While big corporations go full steam ahead with integrating AI, SMEs with limited resources that fail to invest in AI capabilities will be left behind.

As competition intensifies and clients demand more efficient and cost-effective solutions, professional services companies have no choice but to consider AI tools.

As AI evolves, it’s yet to be seen how concerns will be addressed. To prevent risk mitigation and misuse, regulators will need to bring in comprehensive rules to guide its use. Policymakers must strike a balance between encouraging innovation and protecting consumers and employees.

In 2021, the EU was the first to propose specific regulations on AI, with European Parliament members voting in favour of the AI Act draft in 2022. Other geographies will likely follow suit.

The widespread implementation of AI depends on how different countries choose to tackle businesses’ concerns. Addressing their concerns head on and launching initiatives and funding could boost confidence in AI and spur adoption rates.

Even in the face of worries over how AI will develop, it shows no signs of slowing – the IDC forecasts AI spending to surpass US$300 billion (£238 billion) in 2026.

Will AI replace us?

AI capabilities will undoubtedly continue to evolve rapidly, solving more complex issues, delivering more accurate predictive analysis of market trends and providing even more assistance to users in professional services fields.

However, the human element of professional services won’t be displaced anytime soon; AI will play a complementary role, allowing humans to focus on tasks requiring emotional intelligence, critical thinking and creativity.

Experts will have to upskill and work side by side with AI software, leveraging the enormous uses AI provides to make operations more efficient, generate additional revenue opportunities, deliver more value to clients and meet their growing needs.