Professional services firms can either embrace AI or be swept away by it
Professional services firms must strategically integrate AI to remain competitive, while ensuring that core human values like trust and judgement remain at the heart of what they do, says Phil Jenkins
Professional services firms are at a technological fork in the road. One route involves embracing AI and doing it well. The other, either ignoring technological change or utilising it in a damaging fashion, will likely prove terminal for any professional services franchise, be that in accountancy, law, consulting or corporate finance.
Many firms are viewing AI as a genuine positive for their businesses but one that comes with some real challenges to traditional charging models, operating structures and forms of client engagement. For example, what happens to time-based costing when an engagement that once took a week can be delivered in a day? Or when the same unlimited analytical resources available to you are also available to your customers?
Against this backdrop, at Centrus we believe that many of the things that have underpinned the growth and value of our business remain in place. Human relationships and the idea that people work with people who they like, respect and trust, is arguably truer in an AI era than ever before. Human judgement matters – if AI is doing the leg-work and analytical heavy lifting, the overlay of human decision-making, nuance, emotional intelligence, presence and understanding of the client’s needs remains as fundamental as it always has. Trust remains paramount and in a fast-changing and chaotic world, customers will gravitate towards trusted brands that share similar values to them. And underpinning all of this, the platform value associated with human capital, intellectual property, trusted processes, client data, market intelligence, regulation and professional indemnity insurance all remain critical moats around well-run professional services businesses.
Acute challenges
Nonetheless, challenges to traditional business models are acute. With the anchor of “perceived effort” being eroded by AI, professional services firms face the risk of fee deflation unless they can demonstrate clear value through outcomes, speed, insights and the overlay of human judgement and new value-add products which harness the power of AI and easier access to software development. Traditional pyramid team structures are giving way to more vertical models, with client relationship leads and originators supported by AI-fluent colleagues and smaller teams with a focus on succession pathways. In many firms, new roles will be created and staff re-deployed into product development and support.
At Centrus, we are framing our business as providing “trusted advice in an intelligent age” and openly acknowledging our embrace of AI and technology to our clients, as we believe that combining human and technological capital enables us to provide better, faster and more insightful advice and services. This approach has required us to develop clear policies, strong guardrails and robust processes to ensure that our clients’ interests are best served, confidentiality is maintained and proper oversight is in place. Professional services are fundamentally based on trust, and the technology that amplifies advice can also erode and destroy the trust and reputation that has taken years to build.
Professional services firms can either embrace AI or be swept away by it. But adoption brings with it significant responsibilities around governance and controls. The firms that get both of these things right will ensure that their franchises not only survive but thrive in a new and more technology driven era.
Phil Jenkins is group CEO at Centrus