Leveraging AI in the legal and financial sectors
Artificial intelligence (AI) software can perform functions that are more commonly associated with the human mind, such as learning and problem solving. And as businesses seek to reduce costs and increase efficiencies, so the use of AI has exploded.
So it is timely to look at its application in the world of professional services, focusing specifically on the legal and accountancy sectors.
AI is already transforming the ways that many law firms work. Here some of the main areas in which they are exploiting the strengths of AI:
- Contract review and analysis: Lawyers are regularly required to analyse contracts and advise clients of their views and concerns. However, the sheer number of such contracts can be both challenging and time consuming. Using AI can assist in the practical evaluation and categorisation of contracts, allowing legal professionals to spend more time on quality assurance and legal analysis.
- Legal research: Lawyers and legal firms now have access to large online resources covering topics such as past case law, lawyers, judges, courts and damages. They can use AI-based search algorithms to quickly find the most relevant material pertaining to a particular case and develop a suitable case strategy.
- E-discovery: This is a form of digital investigation that looks to find evidence in email, business communications and other data that could be used in litigation or criminal proceedings. Previously this was a manual process, but new software solutions incorporating AI can assist greatly in the identification and review stages of e-discovery.
- Result prediction: Lawyers frequently have to predict possible results for their clients to guide them in deciding whether they want to pursue the case or opt for settlement out of court. New machine learning models are being developed to generate results that forecast litigation outcome. This can help law firms to decide how to handle cases and develop appropriate litigation tactics.
- Document assembly: In order to handle legal applications such as contract, conveyancing or license generation more efficiently, law firms frequently use bespoke software templates. AI can help in the generation of such documents by asking specific questions and automatically filling out relevant fields. It can also be used to read existing contracts and check for any missing clauses.
- Voice recognition: Speech to text software provides legal professionals with the ability to turn voice into text automatically, delivering a range of document creation efficiencies. And the use of AI ensures that the accuracy of such documents is extremely high. In addition, law firms can use AI-based chatbots to handle their customers’ questions and concerns, providing them with preliminary legal advice prior to any human engagement.
Accounting professionals typically spend a significant amount of time on repetitive, relatively low value tasks. At the same time many say they require automation just to keep up with their growing workloads.
Here are some of the key areas in which AI can be of assistance – automating tasks and freeing up time for other, more valuable, activities.
- Streamlining existing financial processes: Because of its ability to process and interpret data with increasing speed and accuracy, AI can handle many of the time-consuming tasks undertaken by finance and accounting teams. For example, AI-based invoice management systems can help by increasing the volume of invoices handled and performing zero-error processing, whilst machine learning can automatically identify and explain bank transactions as they are imported from clients’ bank feeds.
- Budget forecasting: AI can assist in budget forecasting by predicting a company’s future financial performance and creating a budget forecast. It’s able to analyse historical financial data in order to identify patterns and predict future income and revenue.
- Expenses management: When done manually, managing expenses-related processes is time consuming and prone to error. The use of AI facilitates expense tracking by extracting data from receipt images, making sure they are compliant with the organisation’s norms and classifying an expense automatically based on the spending category. Reports are the produced automatically for subsequent management analysis.
- Auditing: AI software enables auditors to make judgments about which areas need the most scrutiny, based on a sophisticated, thorough analysis of data and financial statements. In addition, transactions and account balances can be monitored continuously using AI technology, providing higher levels of accuracy along with assurance that financial statements are being vetted appropriately.
- Reducing fraud: AI can help accountants and finance departments to process larger volumes of data more quickly and regularly than usual. In addition to being invaluable for reporting, this also helps with identifying possible fraud. Machine learning programs can also learn to recognise irregular or potentially fraudulent activity and flag it for review.
- Document production: Accountants typically produce a variety of documents - client correspondence, reports, letters of agreement etc. Speech to text software can help to streamline the document production processes (particularly when integrated with a workflow solution) whilst an AI engine ensures high levels of accuracy in the voice to text conversion.
While there are many benefits to using AI, it will never be able to replace certain aspects of legal or accounting activities. For example, AI doesn’t possess soft skills such as effective communication, problem-solving and critical thinking.
However, speeding up the more time-consuming jobs, means that lawyers and accountants have more time to spend on providing enhanced services to clients or performing other duties that add extra value and set their practice apart from the competition.