Professional services navigate the ethical seas of GenAI while discovering new opportunities

In the not-so-distant past, many assumed blue-collar jobs would be the first to face disruption from AI. However, a significant shift has occurred with the emergence of generative AI (GenAI). White-collar professions, including professional services firms like law, consulting, and accounting firms, are seeking a bearing point to aim their efforts.

In a roundtable co-hosted by RRD, HFS brought together legal, business, and technology leaders, including Boston Consulting Group; McKinsey & Co.; Loeb & Loeb LLP; Morgan, Lewis & Bockius LLP; and Citrin Cooperman & Co., to understand how these firms are (and aren’t) embracing GenAI and where their hurdles are in managing the challenges they face. We found that while these firms recognize GenAI’s potential to enhance efficiency, augment staff, and deliver valuable insights, they are acutely concerned with the ethical and emerging legal demands they and their clients may encounter. As such, many are plotting a prudent course, necessitating a cautious and measured approach to adopting GenAI.

The quest for enhanced productivity, predictability, and a competitive edge drives GenAI’s rise in professional services

The overall adoption of AI in professional service firms has been remarkable. Consultants leverage AI to analyze vast datasets, uncover market trends, decode customer behavior, and gain a competitive edge. Accounting firms employ AI for comprehensive financial data analysis, enabling them to detect irregularities and ensure financial integrity. Law firms, too, have harnessed AI tools for contract review, comparing filings in secure data rooms and exploring legal databases, accelerating the speed at which teams can work.

Across industries, the adoption of GenAI is boosting prediction and productivity capabilities (see Exhibit 1). For predictability, GenAI can help advisors generate reports across new business plans and simulate financial scenarios to provide strategic insights in minutes rather than days. As for productivity, GenAI combs through legal, financial, and contractual data, seeking irregularities in tomes of text and data. These tools then flag areas of interest that require further scrutiny for professionals to augment.

Exhibit 1: HFS finds GenAI brings predictability and productivity as game changers

Sample: Study: Your Generative Enterprise playbook for the future, November 2023; 104 enterprise leaders actively exploring and deploying GenAI
Source: HFS Research, 2023

Similarly, before our workshop, we asked the attendees what the business drivers of GenAI were. Respondents indicated that the adoption of GenAI in their industry was driven by the desire to accelerate business operations, enhance efficiency, analyze data rapidly to make data-driven insights, and augment human capabilities. Collectively, these responses reflect a business case for GenAI driven by the pursuit of operational excellence, productivity, predictability, and competitive advantage.

As professional services firms embrace AI and GenAI, they are confronted by the intricacies of ethical obligations and subtleties of human expertise

The adoption of AI, particularly GenAI, is revolutionizing how professional services operate and offering new opportunities to generate content, potentially saving significant time and resources. However, as our roundtable discourse revealed, while these firms embrace the boundless possibilities of GenAI, they confront the intricacies of their professional obligations and the subtleties of human expertise.

The discussion brought forth several key challenges:

• Ethical considerations weigh heavily on the minds of professionals in these fields. Lawyers, consultants, and accountants are entrusted with sensitive client data and are bound by stringent ethical standards. Maintaining client trust and confidentiality is paramount. GenAI introduces a layer of complexity, as it must align with these ethical obligations. Questions about how AI systems handle, protect, and access confidential information and mitigate the risk of potential answer or response hallucinations must be addressed.
• The essence of professional services lies not only in data analysis but also in the human touch. Human touch elements—customized advice, a nuanced understanding of complex problems, and the ability to adapt to unique client needs—are challenging for GenAI to replicate. While AI can automate routine tasks and provide valuable insights, it cannot replace the expertise, judgment, and empathy human professionals bring.
• Professional services are not simply knowledge workers but trusted advisors. They are responsible for navigating the intricate legal, financial, and strategic terrain alongside their clients. This role, deeply rooted in human connection and tailored solutions, remains virtually irreplaceable by GenAI. There was also a deep concern that there is a risk of losing the learning experience of doing the work with GenAI.

Aside from concerns regarding the nature of work, practical challenges exist when introducing GenAI into these environments. Many attendees acknowledged the difficulty in their field, where data asset management has been inadequate, leading to increased complexity in data labeling and ethical considerations. GenAI frequently overlooks sound knowledge management practices and leads to inaccurate insights that can be detrimental in a sensitive field.

While there’s great enthusiasm for GenAI’s potential, professional services firms are cautious about its impact on their core operations

Our discussion showed most firms prioritize back-office transformation before venturing into the front lines of client service.

Back-office tasks such as templating documents, supporting attorneys to search for relevant legal information and resources quickly, supporting due diligence with vendors, and managing knowledge are common areas where GenAI is extensively employed to improve efficiency and reduce costs. While GenAI holds great potential for front-office applications like customer engagement and personalized recommendations, the current emphasis appears to be on optimizing internal processes and enhancing the quality of services these firms provide, given the regulatory, ethical, and security concerns.

The industry is ripe for transformation; embracing it requires a steady and thoughtful approach

As one participant emphasized, “We need to embrace it. You cannot run from it.” However, another participant emphasized, “It is a Herculean effort to make it ready for enterprise.” The professional services industry is indeed ripe for transformation, and successfully navigating this change requires a thoughtful approach. Some key considerations emerging from the discussions include:

• Balanced approach with rules and guardrails: Achieving a balance between embracing generative AI and implementing necessary rules and guardrails is essential. This involves considering the legal and innovation aspects while understanding GenAI’s long-term role in the business landscape.
• Establishing usage policies and boundaries: Clear guidelines, policies, and limitations are needed for GenAI usage in professional services firms. This includes defining rules for its deployment, ensuring ethical compliance, and specifying its role in various tasks and work products.
• Public vs. private AI models: Choosing between public and private AI models requires caution, particularly regarding the data shared with AI.
• Clear purpose and collaboration: Understand the purpose behind adopting GenAI and collaborate with IT, business, and partners to address specific, measurable initiatives rather than risky endeavors.
• Partnership and networking: Recognize the importance of partnerships to leverage GenAI solutions, regardless of firm size.
• Focus on business readiness and education: Prioritize educating business teams about GenAI’s why, how, what, and what not to do, emphasizing readiness over IT-driven initiatives.
• Agents, not bots: Concentrate on building GenAI agents rather than simple bots, understanding how agents can enhance team, individual, or organizational effectiveness to create value.
• Start with data wins: Begin by achieving early successes using trusted data, learn from these achievements, share knowledge, and replicate successful implementations.

The Bottom Line: In this era of GenAI, professional services firms are not merely adapting; they are setting new standards for responsible innovation.

As custodians of client interests, professional services firms must navigate the new of GenAI with an unwavering commitment to their clients and principles, ensuring that its potential for efficiency gains, cost savings, and competitive advantages is realized responsibly through continuous oversight and the development of AI expertise within the organizations.

We thank our participants in this roundtable for their valuable contributions and insights.

Roundtable participants: AIG, Alvarez & Marsal, BNY Mellon, Boston Consulting Group, Citrin Cooperman & Co, Foley Hoag, Fried Frank, FTI Consulting, HEX Consulting, Loeb & Loeb LLP, McKinsey & Company, Morgan, Lewis & Bockius LLP, Tarsh PB Advisors, Wiggin and Dana LLP, and Wolters Kluwer