Private Equity Warns AI Threatens $2 Billion Law and Accountancy Bets
Updated
Updated · Financial Times · Jun 16
Private Equity Warns AI Threatens $2 Billion Law and Accountancy Bets
3 articles · Updated · Financial Times · Jun 16
Summary
Berlin conference delegates said buyout groups are pulling back from some new professional-services deals as generative AI clouds long-term revenue and valuation models for law, accounting and consulting firms.
Hourly billed work is seen as most exposed: investors flagged writing, translation, bookkeeping and legal services, arguing automation could cut billable hours even as it improves efficiency.
The concern follows AI-driven pressure already seen in software and in listed services groups, with Accenture shares down almost half over the past year.
Private equity has poured billions into the sector — including Blackstone’s more than $2 billion Citrin Cooperman deal — but some executives are now favoring asset-heavy industrials as a safer "halo trade."
Investors still see upside for regulated audit and firms that deploy AI well, suggesting the threat may reshape business models rather than hit all professional-services assets equally.
Private equity warns of an AI threat, so why are they simultaneously pouring millions into AI adoption?
As AI erodes the billable hour, how will elite law and accounting firms now price their invaluable expertise?
Private Equity Faces AI Disruption: How Generative AI Threatens $Trillions in Professional Services Investments
Overview
Private equity leaders are urgently warning that artificial intelligence, especially generative and agentic AI, is rapidly transforming the professional services sector, including law and accountancy. As consulting firms integrate these technologies into their workflows and advise clients on AI adoption, long-established business models and traditional pricing structures are being disrupted. This shift is creating new risks for investors and fundamentally changing talent models, with AI automating much of the routine work previously done by junior professionals. The resulting job displacement and operational changes highlight the need for private equity to rethink strategies and adapt to this evolving landscape.