How can firms continue to grow in an increasingly complex market while balancing investment in their people with investment in technology?
It is a challenge facing leaders across the legal, professional services and wider B2B sectors as client expectations evolve, delivery models shift and traditional career development structures come under pressure.
These were some of the key themes explored at an exclusive leadership breakfast hosted by Meridian West and Ambition at Pan Pacific London. Bringing together senior leaders from across the industry, the event provided an opportunity to discuss how firms can drive sustainable growth, develop future talent and make strategic technology decisions in a rapidly changing environment.
The session featured insights from Matthew Gardner, Managing Director at Ambition, and me, followed by a peer-led discussion on the opportunities and challenges shaping the future of professional services firms.
We are seeing a ‘flattening of the pyramid’ with many firms hiring fewer junior people while placing greater emphasis on mid- and senior-level professionals who can deliver immediate commercial, strategic and client-facing value.
This shift is not limited to fee-earning roles. AI is reshaping business services, administrative teams and management structures as well.
Our discussion highlighted a fundamental tension: short-term efficiency may come at the cost of long-term capability if firms do not continue developing people at entry level.
The unresolved commercial question is how firms will turn efficiency, data and better insight into sustainable profitability while preserving the human relationships and development pathways on which professional services depend.
There was no single model of adoption around the table. Some firms are proceeding cautiously, prioritising control, culture and a clear understanding of the benefits before committing to major change.
Others have invested in several platforms and are encouraging widespread experimentation, while acknowledging that they have not yet designed the teams or operating models that will be needed to capitalise on this investment in future.
The main challenge is therefore not simply access to technology. It is changing behaviour, processes and expectations. Partners are already asking why work cannot be completed immediately if AI is available, even though firms are still learning how to use it consistently and responsibly.
The clearest short-term opportunities appear to be in high-volume work with a defined process, such as insurance claims management where automation is used to improve accuracy, increase visibility and identify fraud rings through analysis of claims data.
In contrast, bespoke litigation and advisory work remain more difficult to automate. Different lawyers may reach similar outcomes through very different methods, making it harder to create a single repeatable process.
This suggests that AI may initially transform repeatable elements of professional work rather than eliminate the need for bespoke expertise. The challenge will be integrating those tools without weakening accountability or the quality of human professional judgement.
In our discussion we challenged the view that the future is simply a “technology versus people” choice.
AI may improve speed and efficiency, but relationships, commercial understanding, judgement and leadership will remain important parts of the service clients value. AI can enhance professional relationships but cannot replace the human element of client work.
Our discussion also recognised that clients increasingly expect senior professionals to understand technology. The implication is that seniority alone may no longer be sufficient. The strongest professionals are likely to be those who combine experience and credibility with technological fluency.
If AI reduces routine work, fewer junior professionals may attend meetings, prepare first drafts or undertake the tasks through which they traditionally developed confidence and judgement.
Clients sometimes question why, in the age of AI, junior staff attended meetings when AI could take notes even though attendance represents an investment in their development. As a result, firms are having to absorb some of this additional time cost which is not chargeable.
At the same time, new talent may bring capabilities that established leaders do not have, including familiarity with AI agents and new ways of designing work. The opportunity for firms is to combine that technological confidence with commercial understanding, strategic thinking and sound judgement.
Clients increasingly expect AI investment to result in faster delivery, lower costs and greater output. This puts pressure on the traditional billable hour model because AI weakens the connection between time spent and value delivered.
The wider question is how firms will price hybrid services in which technology performs some tasks while senior expertise remains essential.
The answer to this question remains unresolved.
There is untapped potential in using firms’ existing matter and client data more effectively with AI being used to support better pricing, more accurate forecasting, improved management information and greater certainty about possible outcomes.
This data can also be utilised to create alternative commercial propositions, such as providing clients with better insight into likely settlement outcomes or packaging knowledge into new services. These remain opportunities rather than proven business models, and they depend on firms investing in improving data quality, governance and accessibility.
Although firms are tracking AI usage in some areas, questions remain over whether current systems are sufficiently detailed to show what work is being performed, how much time is saved and whether the investment is generating a meaningful return for the firm and for clients. This creates a credibility problem.
Firms may be adopting tools and encouraging experimentation without yet being able to demonstrate their commercial impact.
Better measurement will be needed to distinguish genuine productivity gains from activity that merely shifts work from one part of the organisation to another.
In our discussion there was strong advocacy in favour of closer integration between pricing, finance, business development, project management and client leadership. Traditional functional silos cause friction when firms need to manage technology, profitability and client value together.
There was also debate about whether professional managers should take greater responsibility for running firms. Excellent lawyers, for example, are not automatically excellent leaders or managers. Partners may be better focused on client relationships and legal expertise while professional managers oversee the business.
It was acknowledged that AI has a significant energy footprint, but the evidence from our discussion is that clients of firms are not currently asking detailed questions about it. Cost pressures around AI adoption and token usage are expected to become visible before environmental concerns do.
One possible future model would be to route simple queries to lighter, less energy-intensive tools and reserve more powerful language models for complex analysis. For now, this remains a largely forward-looking idea for most firms rather than an established operating practice.
A big thank you to everyone who joined us for such an open and insightful discussion, and to Matthew Gardner from Ambition for helping facilitate a conversation on one of the most important challenges facing professional services leaders today.
