3 Ways AI Is Revolutionizing Professional Services
For nearly every sector, AI and ML are not elements of a far flung future, but real tools useful to companies right now. Few industries feature more paperwork or repetitive tasks than the big two professional services — accounting and legal work — and tasks like invoice review, budgeting and compliance are particularly well-suited for AI intervention.
Look to the legal and finance departments within enterprise companies; too often in-house counsel are bogged down in administrative paperwork that takes away from thought-provoking, value-creating pursuits. While this represents a kind of busywork, the repetitive tasks in legal and finance are more likely to be highly sensitive and highly valuable.
AI offers an answer, and according to Deloitte, the technology will soon be inextricable from other processes within legal and finance departments. While there are innumerable ways artificial intelligence and machine learning can transform business, here are three ways the emerging technology has already changed two of the oldest lines of professional work:
Reviewing and Correcting Invoices
Corporate legal departments and accounting firms process an incredible number of complex invoices each month, and the professionals who oversee that work should welcome the extra hands provided by AI. But what does it look like when the task of reading and categorizing line items is entrusted to an algorithm?
Natural language processing tools can interpret invoice text with near-human insight and improve their accuracy over time when trained via machine learning protocols. In legal invoicing, for instance, there are now opportunities for software to not only confirm the contents of line item narratives, but also to compare them against client billing guidelines when making invoice approval decisions.
Select invoices may even be processed by the AI without any human intervention whatsoever. For instance, if the invoice matches a very specific set of financial and compliance criteria, the software can be programmed to route the approved expenses to accounts payable without bothering a human reviewer. For most invoices, however, the most significant AI impact comes from flagging and surfacing the issues that are worth a human reviewer's attention. This is especially true of large invoices that have one or more soft violations of billing guidelines.
Creating Smarter Financial Forecasts
Within most enterprises, budgets are set ahead of the new fiscal year and remain fixed for 12 months. When the next round of budgeting comes around, the finance department brings up the previous year’s budget as a starting point. The COVID-19 pandemic of 2020 showed us the folly of planning too far ahead. As a result, companies had to revisit their budgets several times, and when budgeting for 2021 began, most would concede that the 2020 budget wasn’t their best guide.
AI can be used to quickly compare and apply data from previous years and past projects. For example, by comparing the work of all accounting or legal matters related to corporate mergers of two companies with more than $1 billion in revenue, a machine learning algorithm might predict that document review will last 300 hours and that the matter itself might take 1,400 hours. This helps the finance team more precisely account for impending expenses.
AI platforms also offer insights derived from multiple distinct users. By leveraging a well-trained AI, you can plan budgets using your own financial data and emerging benchmarks from your peer organizations.
In the world of corporate law, the legal budget has been a black box. “It costs what it costs,” has been an excuse for in-house counsel. With more accurate and relevant data extracted from legal departments thanks to the advent of legal operations, the legal budget is a black box no longer.
The legal department is now accountable to the same financial expectations applied to every other business department, and the pandemic only accelerated this trend. Companies need complete transparency, and CFOs are expecting proactive cost avoidance and optimization from everyone. With AI-assisted budget projections, the finance department can be a true business partner.
Spotting Irregularities and Maintaining Compliance
Artificial intelligence can drastically increase the speed and efficiency of regular audits and analysis of corporate transactions. Machine learning algorithms can examine a year's worth of transactions for irregularities much more quickly than their human counterparts, enabling companies to move away from using traditional sampling approaches.
Companies can also use natural language processing to examine critical documents, such as contracts, and to analyze those documents for potential risk and compliance issues. In this respect, rather than a replacement for the work of human professionals, AI is adding another layer of protection for businesses and stakeholders.
AI is already incorporated into the daily work of many in professional services — automating repetitive tasks, projecting budgets and offering an additional layer of security. It will not replace lawyers or accountants, but professionals who know how to employ AI will have a distinct advantage over their peers who do not.
For many accounting, legal and consulting professionals, their jobs offer opportunities to tackle complex problems. By streamlining administrative work and freeing human beings up to focus on tasks that require their critical thinking skills, AI is changing the way they work.
About The Author
Alex Kelly is the COO and co-founder of Brightflag, an AI-powered enterprise legal management platform. Prior to founding the company, Kelly advised financial institutions and multinational enterprises as a corporate lawyer within a large international law firm.