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C-Suites’ Concerns Over Artificial Intelligence’s Rising Presence Should Catch Attention of Tax and Legal Experts

Artificial intelligence (AI) is becoming more and more integral to the operations of companies in the swiftly changing business environment of today. According to the most recent “Future of Professionals Report,” the corporate C-Suite is adopting AI at a faster tempo than their counterparts in the legal and tax sectors. Legal and tax professionals may need to reevaluate their approach to remain in alignment with the evolving requirements of their clients as C-Suites continue to adopt AI.

The Expanding Role of AI in Business

Businesses in a variety of sectors are anticipating a significant influence from artificial intelligence (AI), particularly generative AI (GenAI). The 2024 Thomson Reuters Future of Professionals Report indicates that 42% of the more than 2,000 professionals who were surveyed anticipate that AI and GenAI will significantly impact their respective disciplines, while an additional 36% anticipate a significant impact. Nevertheless, numerous professionals in the legal and tax sectors are hesitant to completely adopt these technologies.

The reluctance is comprehensible, given the ethical implications of AI, data security, and accuracy. Nevertheless, this cautious approach has the potential to result in a substantial disparity between the rate at which legal and tax professionals implement AI and the rate at which their clients—corporate C-Suites—are integrating these technologies.

Diverse Strategies for AI Adoption

The report emphasizes a significant disparity in the application of AI in a variety of professional fields. 82% of respondents reported that they have utilized AI to initiate work duties at least once, with corporate C-Suites leading the charge. Additionally, 60% have implemented this strategy on multiple occasions, while 24% consistently depend on AI to initiate their work processes.

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In contrast, the percentage of legal and tax professionals who reported using AI to initiate tasks was only 60%, which is over 20 percentage points lower than that of their C-Suite counterparts. Even more revealing, the percentage of legal and tax professionals who employ AI in their workflows is a mere 10%, which is substantially lower than that of the C-Suite.

The Obstacles to AI Adoption in the Legal and Tax Sectors

The reasons for the circumspect approach of legal and tax professionals to AI are distinct. The principal concern for those in the legal sector is risk. The veracity of the technology was a concern for nearly half of the legal professionals who refrained from utilizing AI. Furthermore, over one-third of the respondents expressed concerns regarding the ethical implications of incorporating AI into legal practice and the security of their data.

Conversely, tax professionals frequently encounter difficulties in locating the time or resources necessary to investigate artificial intelligence (AI) tools. Although 36% of tax respondents expressed uncertainty regarding the effective implementation of AI in their work, they also expressed concerns regarding data security and accuracy. A third of these professionals acknowledged that they intend to utilize AI in the future, but they have not yet had the opportunity to do so.

The C-Suite’s Viewpoint on AI

Corporate C-Suites are already experiencing the advantages of AI integration, despite the reluctance in the legal and tax sectors. 74% of C-Suite respondents who have implemented AI to initiate their work considered it to be at least an effective starting point, if not superior. It is noteworthy that 14% of these executives even claimed that AI generated “an output that was more powerful than anything I could have produced manually.”

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The potential disparity between the C-Suites and their legal and tax advisors is underscored by the increasing confidence in AI among corporate leaders. If legal and tax professionals persist in their failure to implement AI, they are at risk of failing to meet the expectations and requirements of their clients.
Coordinating the C-Suite’s Legal and Tax Priorities

This is not the first instance in which there has been a discrepancy between the priorities of the C-Suite and those of legal and tax professionals. Last fall, a survey conducted by the Thomson Reuters Institute demonstrated that legal departments prioritize the protection of the business, whereas C-Suites concentrate on consumers, talent, and growth. In the same vein, tax professionals prioritize operations over consumer and talent concerns.

The varying attitudes toward AI are indicative of these contrasting priorities. The risks of inaccuracies and security breaches are the primary concern of legal professionals, whereas C-Suites are more interested in the potential benefits of AI to their customers and the development of their businesses. In the interim, tax professionals are prioritizing the maintenance of operations over the exploration of new technologies due to a shortage of talent.

The Future of Legal and Tax Professionals

The challenge for legal and tax professionals is to reconcile their traditional emphasis on operational efficiency and risk with the necessity of incorporating AI technologies that their clients are increasingly employing. Although vigilance and caution are still essential, it is becoming equally necessary to comprehend and utilize AI in a manner that is consistent with the objectives of clients.

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Legal and tax professionals must devise methods to incorporate these technologies into their practices as corporate C-Suites continue to regard AI as a critical instrument for the future. This will not only guarantee that they continue to be valuable partners to their clients, but it will also assist them in maintaining their competitiveness in a professional environment that is swiftly evolving. Embracing AI is not merely a matter of keeping up with technological advancements; it is a matter of guaranteeing that legal and tax advisors can continue to deliver the highest quality of service in a world where AI is rapidly expanding.

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Nicola Taljaard Lawyer
Lawyer - Associate in the competition (antitrust) department of Bowmans, a specialist African law firm with a global network. She has experience in competition and white collar crime law in several African jurisdictions, including merger control, prohibited practices, competition litigation, corporate leniency applications and asset recovery. * The views expressed by Nicola belong to her and not Bowmans, it’s affiliates or employees

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