The future of the professional firm
No ‘em-dash’ (—) in sight: My newsletter might be worth reading, if only for the fact that ai didn’t write it. Warts ‘n’ all, it takes me 3-4 hours to write one, hence why can I post just one per week. I don’t write for you, I write for me.. and share it with you. I have no interest in asking someone or something, what I think I think. I have faith in humankind’s ability to endure and overcome this ludicrous phase. I’m with humans for the win.
I’m writing this at 3am on a foggy Friday morning. After a particularly deep conversation with a long-term client on AI and the future of the professional firm, I couldn’t sleep. I was tossing and turning for hours, thinking through this very hard problem. Its a trait that my wife has never particularly thanked me for, but has plagued me my entire life. The only fix is to get up and commit it to paper.
My client had become frantic about the idea that AI will replace the majority of professional service providers within the next 1-2 years. I was unable to tell him immediately not to believe the hype and give him the answer he needed.
I’ve sat with it, and attempted to sleep on it, and here is my view;
I can imagine that when the very first book was bound, and age-old traditions that had been handed down for millenia were finally committed to paper, there would have been a great deal of concern about what meant for the future. This once private, sacred knowledge, acquired through hard-fought experience, would now be memorialised for more to access, learn and apply.
Would this wisdom now lose its value? What if it finds its way into the wrong hands? Would the Shamans, Loremasters and Elders become redundant now that we can get it from these preserved texts?
And into modern times, I can imagine when publishing reached the mainstream and commercial distribution of books meant that everyone could now access every piece of information that had ever been committed to paper.
And I was there for the mass hysteria that hit us in 1993 when the “world wide web” suddenly meant that all the information that ever was was now at our fingertips.
And now, a little over thirty years later, here we are again.
From the mouth, to the manuscript, to the printing press, to the web, and now to a machine that can retrieve what has been written and recombine it on request. Each era made knowledge cheaper and more widely available than the one before it, and at each step someone confidently predicted the end of the people who held it.
The information was always there, only the speed at which you can retrieve and assimilate has increased. Its no bad thing, since knowing how to do something and actually doing it is a vast chasm, and always was. Its what always separated the men from the boys.
Warren Buffett’s edge was never his ability to analyse a deal. He learned that from Benjamin Graham, who published his method for anyone willing to read it and taught it to a lecture hall full of students at Columbia. Plenty of people learned the same techniques from the same man, yet only one became Warren Buffett. What separated him was temperament: the patience to do nothing for years at a time, the discipline to turn down deals that looked perfectly sensible to everyone else, and the nerve to commit heavily at exactly the moment the market was least inclined to. The analysis could be taught but the judgement about when to use it, and when to ignore it, could not.
True human expertise has survived each of those transitions because the client was never paying for information. Information was never the EDGE. The scarcest commodity was, and always will be, human experience and judgement.
Will AI eventually develop enough empathy, and enough of the emotional bias that shapes human judgement, to imitate even those qualities convincingly? Perhaps it will. But if it does, the question moves from capability to taste.
Every time something becomes cheap and abundant, part of the market deliberately moves in the opposite direction. Record players have returned to living rooms, even though every song ever recorded is available on the phone in your pocket. People are writing letters by hand again. Dinners, private rooms and small in-person gatherings have become more sought after again in a world where you can meet anyone on a screen at no cost. When the machine-made version becomes the default, the human version acquires a value it never had before, precisely because it is slower, harder and more costly to produce.
The rise of AI has made human interaction the ultimate luxury good.
So back to my clients conundrum, the answer is simple;
If your firm exists to produce reports, gather information or implement a technical skill to a known standard, your days are numbered. That is exactly where the world can, and should, now turn to AI, because it will do the work faster, more thoroughly and for a fraction of the price.
What it cannot do is be the person who has already walked the road you’re on. The one who has built the thing, sold the thing, and made most of the expensive mistakes along the way, so you don’t have to. Someone who rides shotgun through the execution, tells you the truth when everyone else is telling you what you want to hear, and picks you up off the floor when it goes wrong, because at some point it always does. Nobody lay awake at 3am for want of information, we lay awake because we are carrying a decision on our own, and what we want more than anything else is someone beside us who has carried that weight before and knows it can be done.
So when I call my client later this morning, I won’t tell him the hype is wrong. Some of it is right, and it is coming for a chunk of what his firm currently sells. I’ll tell him that the elders survived the book, the scholars survived the press and the advisers survived the internet, and every one of them survived for the same reason. When the decision really mattered, people wanted someone across the table who had been there before and would still be there afterwards. That has been true since the first story was told around a fire, and I don’t expect a machine to change it.
I’m no Luddite. I understand the importance of AI, and I take its implications seriously. But a tool that anyone can use isn’t an edge. I know what mine is, which is why, for all the lost sleep, I don’t fear what’s coming.
Do you know what yours is?
