Welcome to Eye on AI. In today’s news, the U.S. Senate has rejected a moratorium on state-level AI laws, Meta has unveiled its new AI organization, Microsoft claims AI can outperform doctors in diagnosis, and Anthropic highlights the risks of letting an AI agent run your business prematurely. AI is reshaping the landscape for professionals in various fields such as law, accounting, auditing, compliance, consulting, and taxation. The experiences of these professionals and their firms serve as a warning of what may transpire for other knowledge workers in the near future.
An interesting discussion took place at Oxford University’s Said Business School during a conference on the “Future of Professionals,” sponsored by Thomson Reuters. The conference coincided with the release of a report commissioned by Thomson Reuters on AI trends in professional services. The report, based on a survey of 2,275 professionals, revealed that professional services firms are achieving a higher return on their AI investments compared to other industries. Over half of the respondents reported finding at least one AI use case that was profitable for their firm, which is twice the rate seen in broader surveys.
Thomson Reuters found that firms with a well-defined AI strategy and governance structures were most successful in leveraging AI technology. Even among companies with less structured AI adoption, a significant portion still reported positive returns from AI use cases, showcasing the productivity and efficiency gains achievable through AI tools.
Major challenges hindering AI adoption included concerns about accuracy and data security. Mari Sako, an Oxford professor, identified three critical gaps in managing AI implementation: the responsibility gap, the principles-to-practice gap, and the goals gap. These gaps highlight the need for clear accountability, operationalization of ethical principles, and alignment on the purpose of AI implementation within businesses.
For more insights on AI implementation in law firms, check out this feature by Fortune’s Jeff John Roberts.
In place of human judgment
Ian Freeman, a partner at KPMG UK, discussed how his firm is increasingly utilizing AI tools to support auditors. Previously, auditors had to depend on sampling transactions and focus more scrutiny on those posing higher business risks. However, AI now allows for screening every single transaction, with a particular emphasis on the riskiest ones. Freeman highlighted how AI could assist junior auditors in comprehending the reasons behind investigating specific transactions and could streamline routine financial analysis.
Despite these advancements, KPMG maintains a policy of refraining from deploying AI in situations requiring human judgment, such as determining materiality thresholds, evaluating the sufficiency of evidence for certain accounting treatments, or establishing appropriate reserves for new products. While AI could potentially serve as a valuable educational tool for junior auditors to develop their professional judgment, concerns remain about its role as a tutor or mentor in such scenarios.
During a conference segment conducted under Chatham House Rules, a senior partner from a prominent law firm noted the faster adoption of AI by corporate legal departments compared to legal firms. This trend, as indicated by a Thomson Reuters survey, is exerting pressure on legal firms to enhance transparency regarding AI usage and reduce legal bills by leveraging AI to streamline tasks.
The discussion at the conference also touched upon the evolving career paths within professional service firms influenced by the growing importance of AI expertise. Lawyers highlighted the challenge of attracting and retaining AI talent, particularly when these technical experts without legal qualifications feel undervalued compared to client-facing lawyers and face limited prospects for advancement to top management positions.
Michael Buenger, from the National Center for State Courts in the U.S., emphasized the difficulties faced by governments in recruiting AI experts and ensuring access to independent expertise for judges and juries when ruling on potentially AI-altered evidence. The lack of expert guidance in evaluating manipulated evidence could undermine public trust in the judicial system’s ability to administer justice.
While there were numerous insights shared at the conference, these are the highlights for today. Stay updated with more AI news below.
*Please note that the text above was originally written and revised by Fortune’s editorial team, while the subsequent AI-generated news items were curated, edited, and fact-checked by the newsletter author, Jeremy Kahn. For further inquiries, contact Jeremy at jeremy.kahn@fortune.com.
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