AI – the dawn of a new era, or extinction of mankind?

Congratulations to our Government for hosting the summit and for making us focus on the issues and the potential AI has, to cause the extinction of mankind or an irreversible global catastrophe, either AI-led or driven by malicious actors.

I am more interested in how it could be used to create ‘fake news’, enhance our medical strategies, and impact how we communicate and ultimately how we work.

The truth is the application of AI by professional services firms will be far more prosaic.

The obvious business benefits include:

• Automating repetitive tasks
• Reducing costs and achieve the Nirvana of improved productivity and effectiveness.
• Improving the speed of decision-making resulting from quicker access to more comprehensive and accurate indices, data, and intelligence
• Better resource utilisation – more accurate data analysis will enhance resource deployment
• Enhanced talent management – creating personalised ‘skilling plans’ which more accurately reflect an employee’s personal learning styles.

For most of us, AI is synonymous with ‘Generative AI’, the use of machine learning to generate new content and data.

So how could we deploy this potent new business tool? There are a growing number of ‘experts’ only too willing to help bridge the gap between where most of us are and, where we could be using this technology but for a price of course.

So let me share five simple truths I have discerned from my initial exploration of how AI could impact our firm:

1. Understand what your needs and resources are: should you adopt an existing AI solution, such as ChatGPT, or create your own system from scratch – because your business model is unique and it could prove a less expensive option.
   Consider the fact that there have been many instances of firms developing proprietary systems only to discover that, given the resources required, the perceived gains are dwarfed by the benefits of opting for an off-the-shelf option, which is automatically and regularly upgraded.
2. Have a clear implementation strategy: Having a clear roadmap, with agreed success metrics, managed by an appropriately skilled and empowered team, is critical.
   Secure the support, trust, and financial backing of the senior management team to develop, learn, implement and most importantly, continue to evolve the solution.
3. Efficacy of input data: to achieve insightful and high-value outputs requires accurate data inputs, which represent all aspects of the business process.
   The datasets must be unbiased and a true reflection of every aspect of the firm’s operating model.
4. Test, Test and Test again: having selected the right hardware and software, as well as the right team, be they professionals AI developers, in-house experts, or a combination of the two, testing and retesting the outputs is key.
   Benchmark against pre-AI key outputs is critical to accurately assess the efficacy of the system.
5. AI is a journey, not a destination. AI will be adopted first by disruptors as it will underpin their ability to compete and succeed and then by all firms. It will change how we do business.
   Ultimately, it will force us to review how we operate.

A young lawyer I know recently painted a vivid picture of how AI could change how his Chamber operates. He cited a courtroom barrister, armed with an AI tool capable of monitoring, in real-time, the arguments cited in court, as well as the cross-examination. The system would instantly provide advice on potential precedents, questions and advice, including questions based on the judge’s historical responses to similar legal arguments.

Armed with this AI tool, the barrister will have an edge and build the jury’s trust in the logic of his argument, based on his (AI-assisted) performance rather than the expertise built up over years of appearing in court.

A major issue for all professional services firms which bill by the hour, is how do you charge for ‘trusted advice’. If your fee structure is predicated on a leveraged rising scale of expertise – from graduate to Director or Partners. AI will flatten that hierarchy (by dispensing with juniors doing research) and therefore it will change the fee structure.

Will clients view subsequent generations of ChatGPT and Microsoft 365 Copilot as a low-cost alternative to their advisors, an explicit challenge to firms charging fees for advice?

Will AI ultimately replace professional services advisors?

In the property sector, AI could, for example, replace valuers undertaking property valuations, by assessing property data, combining the results with empirical comparable data and creating a cogent valuation report for lenders to review when making their (lending) decisions.

AI could also replace property agents - by instantly matching available property with clients’ requirements, no matter how sophisticated and idiosyncratic their brief.

Another challenge is, given the fact that AI is best deployed for ‘routine’ tasks, how do we redefine what we do, to focus on more complex problem-solving aspects of the role, and therefore retain our job?

There are a few significant ‘buts’ to be considered. The inherent challenges of AI adoption include:

• Automating tasks normally undertaken by less experienced team members will inevitably lead to more work being undertaken by fewer people. This could result in a fundamental review of fee structures – perhaps creating downward pressure on pricing strategies, to stay competitive.
• Early career professionals will have to adopt alternative skilling and professional learning strategies, as traditional (learning) methodologies (such as researching data, cases, comparable intel, etc) will be undertaken by an AI system in seconds, rather than hours
• Governance: new guidelines, quality review processes, risk mitigation protocols and professional liability risks will have to be developed to minimise bias, data inaccuracies and AI’s potential to arrive at misleading conclusions
• Aggregation: given the fact that Generative AI tends to use a public algorithm model, how can we prevent the loss of proprietary data and knowledge, as well as client’s market-sensitive intel?

However, let us not forget that whilst AI will be able to research, aggregate and undertake comparative analysis and generate reports far faster than humans, our intuitive interpretation (every ‘trusted advisor’s’ USP) will remain a critical part of the process.

Our ability to empathise, sympathise, develop creative solutions and tailor the delivery of advice to the character, temperament and idiosyncrasies of our clients will not disappear…ever!

The truth is AI has landed. It is our industrial revolution and it will prove a great disruptor.

However, to quote Caliban in The Tempest, “Be not afraid. The isle is full of noise….”

AI will redefine how we work and how our advice is valued.

Therefore, there is still a role for advisors who demonstrate emotional intelligence, intuitive deductive logic, empathy, a combination of technical skills and a sensitivity to the cultural and idiosyncratic differences among our clients.