Key takeaways:

• • • Tax departments lack resources and confidence — More than half (58%) of tax departments are under-resourced, and 59% are not confident that they can upgrade their tax technology over the next two years.

    • Under-resourced departments incur more penalties — At least half of respondents from under-resourced tax departments say their departments incurred penalties over the past year, compared to only about one-third of those from properly resourced departments.

    • Making the shift to proactive planning and value creation — For many tax departments, the winning model blends in-house expertise, targeted external support, and a coherent tech/AI stack that allows teams to shift from tactical compliance to proactive planning and strategic value creation.

Under-resourced corporate tax departments spend more of their budget on external support compared to well-resourced teams — yet they’re more likely to incur penalties and less confident in forecasting, according to the Thomson Reuters Institute’s .

Given this, the problem isn’t a lack of spending — it’s the operating model. With respondents from 58% of tax departments saying they are under-resourced, 59% saying they lack the confidence needed to upgrade their existing tax technology over the next two years, and most spending more than half their time on reactive compliance work when they’d prefer to focus on strategic planning, clearly the gap between ambition and reality has never been wider.

The answer isn’t working harder or throwing more money at consultants, however. It’s building a hybrid ecosystem of people, platforms, and partners designed to shift capacity from firefighting to foresight.

The Groundhog Day problem

Every year feels the same: New tax legislation (such as the One Big Beautiful Bill Act or Pillar 2), new compliance burdens, new geopolitical uncertainty — coupled with the same old constraints. Too much work, not enough time, and technology that lags.

When deadlines hit, under-resourced teams rely on two blunt levers: overtime and reactive outsourcing. Internal staff end up working longer hours, and external providers plug the gaps at short notice. This model is breaking departments and it’s breaking down itself.

Under-resourced departments are significantly more likely to incur penalties, with 50% of respondents saying their under-resourced department had been penalized in the past year, compared to just 34% of respondents from well-resourced departments that say that, according to the report.

Further, under-resourced department respondents said they were less confident in their ability to forecast accurately, with just 26% saying their ability to forecast accurately was “very likely” compared to 43% of well-resourced department respondents. Ironically, under-resourced departments also spend more on external support as a percentage of budget (44%) compared to 37% for well-resourced departments. Clearly, spending more doesn’t solve structural problems — it often masks them.

Meanwhile, tax professionals report spending more than half their time on tactical or reactive work, even though they would prefer to spend up to two-thirds of their time on strategic analysis. Not surprisingly, when the team is locked into manual reconciliations and last-minute fixes, it’s nearly impossible to influence business decisions or shape strategy.

Why “all in-house” or “all outsourced” no longer works

When more work is moved onto the plates of the internal tax team, all in-house can often come to mean all heroics — talented people drowning in compliance volume with no time to use the analytical tools already on their desks. Conversely, all outsourced risks hollowing out the department’s institutional knowledge and weakening its seat at the table.

A hybrid model asks better questions: What kind of work is this, and where does it create the most leverage? These questions can be used to determine where and to whom work should go. For example, high-volume, rule-based, recurring tasks are prime candidates for automation, shared services, or managed services under strong tax oversight; while complex, judgment-heavy, strategically sensitive work should remain anchored in-house, with external advisors extending capacity and offering specialized insight.

Thus, the best model for a modern corporate tax department is a hybrid ecosystem — not a fixed organizations chart, but a deliberate blend of internal expertise, enabling technology, and external capability partners.

Four layers of the hybrid ecosystem

This hybrid ecosystem can be delineated into four layers, each bringing their own insight and value:

1. 1. 1. People and roles redesigned — High-performing tax functions invest in analyst and tax-tech roles that connect tax to enterprise resource planning (ERP) systems, data hubs, and analytics, thus freeing technical experts from manual data work. Senior professionals then become embedded advisors to finance, treasury, and the business, not just compliance reviewers.
      2. Processes segmented into “run” and “change” — The biggest barriers to strategic work are excessive volume, heavy compliance burdens, limited resources, and time pressure. Modern tax departments respond by explicitly segmenting work in which run the business processes are documented, standardized, and increasingly automated or pushed into shared or managed service models. Change the business work remains tightly linked to senior tax staff.
      3. Technology becomes the data spine — More than half of respondents say they expect above-normal increases in their tax technology budgets, and more than half say their main resourcing strategy is introducing more automation. The goal isn’t collecting point solutions; rather, it’s building a coherent data spine that includes ERP integration, tax-specific data models, consistent workflow tooling, and strategic platforms that flex as regulations shift.
      4. AI act as an accelerator — Two-thirds of tax departments aren’t yet using generative AI (GenAI), according to the report. And among the one-third that are, usage clusters around research, document summarization, drafting, and some analytical support. The next step up the AI chain is for departments to move from individual experiments to standardized, governed workflows that scan legislation, prepare first drafts of memos, or interrogate large data sets for anomalies.

What high-performing hybrid tax departments do next

Departments that feel well-resourced, allocate more time for their professionals to conduct proactive work, and invest deliberately in technology and skills are significantly more confident in their ability to forecast accurately, avoid penalties, and minimize tax liabilities, the report shows.

Indeed, these high-performing hybrid tax departments:

• • • invest ahead of crises in people, tech, and processes
    • treat external providers as capability partners, not emergency relief
    • actively protect time for strategic work by automating or outsourcing routine tasks
    • insist on a durable seat at the strategy table, not just one for compliance reporting
    • experiment with automation and AI in focused, repeatable use cases

It is worth noting that smaller companies (those under $50 million in annual revenue) and the largest one (those with more than $5 billion in revenue) are leading the way by securing leadership buy-in early and leveraging specialized external expertise rather than trying to build everything in-house. Midsize companies, by contrast, are more likely to rely on in-house teams to lead automation efforts and less likely to use third-party vendors — a cautious approach that risks having them fall too far behind to catch up.

The message: Design the ecosystem, don’t just work harder

For corporate tax professionals, the message may be harsh but hopeful: You cannot work your way out of structural constraints by effort alone. Rather, a well-designed hybrid ecosystem can turn those constraints into a catalyst that will allow the department to deliver more value to the business. In fact, the modern corporate tax department is hybrid by necessity; but the question is whether it’s hybrid by design — or just by accident.

You can learn more about the challenges facing modern corporate tax departments here

Key takeaways:

• • • AI is blurring the lines between HR and IT — The increasing integration of AI agents into workflows is prompting organizations to merge their HR and IT functions, with a significant percentage of IT leaders saying they expect this trend to continue.

    • Strategic actions for success — To effectively integrate HR and IT and leverage AI, organizations need strong, cross-functional leadership, a clear strategic direction for AI adoption, cultivation of AI literacy and adaptability, and a data-driven approach to cultural transformation.

    • Human adaptation is key — Unlocking organizational potential can only occur with thoughtful leadership that prioritizes human adaptation and intelligently orchestrates the integration of people and AI.

As AI continues to transforms the future of work, a are breaking down traditional departmental silos by merging their HR and IT functions under unified leadership — and many expect this trend to continue in the future. Indeed, 64% of IT leaders surveyed say they believe HR and IT will . This strategic convergence is a fundamental shift that is compelling organizational leaders to reimagine how work gets done while presenting other complex challenges.

The convergence of HR and IT functions

The rapid ascent of AI agents from current tools to a future state in which they are expected to be colleagues is blurring the lines between traditional technical and non-technical roles. As Skillsoft’s Chief People Officer Ciara Harrington : “There is no role that’s not a tech role.”

For many forward-thinking organizations, merging these departments offers a combination of benefits and paves the way for a more integrated, data-driven, and agile organization, that clearly offer some benefits including:

Holistic workforce architecture — Merging HR and IT enables leaders to design how work is done and better align human skills with hardware, software, and AI. For example, around workflows by segmenting what technology should do and where humans add irreplaceable value, explains Tracey Franklin, the company’s chief people and digital technology officer.

Streamlined innovation and agility — When HR and IT co-own transformation, organizations can adapt faster to new tech and processes. In another example, to sit within the same bigger team because they both are building systems that support the rest of the business.

Transformation brings about challenges

Navigating the risks of merging HR and IT is not without challenges, however, and organizations must carefully address several barriers to progress, which include:

Loss of specialist expertise — The most pressing concern involves diluting critical professional knowledge. “Merging the departments risks losing or diluting the specialist expertise organizations need to thrive,” warns David D’Souza from the Chartered Institute of Professional Development. Indeed, the skillsets of HR and IT professionals involve few areas of overlap.

Cognitive depletion — A risk that is just starting to get the attention it deserves is the danger of over-dependence on AI that can cause reduced cognitive capabilities. “If AI agents do everything with us, we lose skills,” says Skillsoft’s Harrington. Indeed, this long-term capability risk is multifaceted, resulting in core human skills atrophying and bench strength, adaptability, and ethical discernment weakening.

New roles, metrics, and leadership — Perhaps the most challenging areas are those that will determine who will manage the AI agents, how human-AI team performance will be evaluated, and what professional development looks like for hybrid human and AI agent teams. Answering these key questions remains an area of ongoing deliberation.

Likewise, traditional HR metrics don’t fit human-AI teams. Organizations must redefine performance, learning paths, and career progression for both humans and AI. In addition, organizations still need leaders who can navigate the human side of transformation as AI integration accelerates.

Key actions for companies

To unlock real returns on AI investments and from HR and IT integration, organizations need visionary, cross-functional leadership that sets clear strategy, aligns operations, and equips people to work differently. Must-do actions include:

Developing strategic direction — Research in the recent �������� Future of Professionals Report 2025��identifies four interconnected layers for AI success, which include a clear, visible plan for AI adoption (strategy), committed leaders who model the right behaviors (leadership), adjusted workflows and roles to leverage AI (operations), and ways to empower people to learn and set personal AI goals (individuals).

While organizations that align all four layers unlock the greatest value from AI, the first layer, strategy, is the single strongest predictor of AI return on investment, according to the report. And the same is true for successful HR and IT integration. It requires leaders who can bridge both worlds without necessarily being technical experts, while also setting direction and providing vision, allocating capital effectively, removing obstacles, fostering culture, and engaging employees.

Cultivating AI literacy and adaptability��— Organizations also must develop comprehensive AI training with responsible AI, including clear usage policies. This includes preparing employees to incentivize experimentation around recreating their own workflows to allow AI to execute repetitive tasks while team members can then focus on more complex problem-solving.

Data-driven cultural transformation��— Success requires using data strategically to transform the culture to shift to collaborative human/AI ecosystems. Some companies are using data and building accountability mechanisms to ensure leaders are culture promoters and data stewards. Without this data-centric approach to cultural change, organizations likely will fail to realize the full potential of integrated HR and IT functions.

Yet, no matter what functions are merged, organizational potential is unlocked by thoughtful leadership that centers human adaptation and intentionally orchestrates how people and AI integrate to do the work. Now is the moment for companies to define a clear roadmap, invest in capability-building, and pilot human/AI teams with measurable guardrails to help organizations learn fast, acclimate to new work realities, and scale what works.

You can find out more about how organizations are addressing issues of talent development and management here

In addition, more options for flex hours and four-day work weeks emerged. Creativity around the time-and-place work paradigm, especially for knowledge workers, blossomed; and team members began to rely on these flexible options to better integrate their work and life schedules. Flexible work options moved from a nice-to-have perk to a must-have benefit that team members now relied upon.

In the last few months, however, headlines have been peppered with news of companies rescinding their work-from-home options and putting in place return-to-office (RTO) mandates. Some business leaders are even mandating five-days-a-week in the office beginning January 2025.

When explaining the mandates, the reasons these RTO promoters give vary, including the need for in-person work to improve collaboration, innovation, productivity, learning, relationships, and company culture. But this RTO news is not sitting well with companies’ talent. For example, when Amazon recently made an RTO announcement, a of 2,585 Amazon employees found that 73% of employees are considering looking for another job because of the new in-office work policy.

RTO mandates risk turnover, which will likely negatively impact work culture and productivity, which in turn can ultimately lead to greater turnover.

The tax & accounting profession is already facing capacity and talent pipeline challenges. The number of college graduates heading into the profession has been declining, and only “one in nine college business-related bachelor’s graduates” are choosing an accounting degree, according to the (NPAG). Given the number of career options open to accounting graduates, tax & accounting firm leaders need to be mindful of what will appeal to talent at all levels.

Flexibility in work is crucial, survey says

In 2024, ConvergenceCoaching added an element to its biennial that queried accounting firm leaders on their remote and flex work offerings and also surveyed public accounting team members to hear their thoughts on these benefits.

Responding team members confirmed the importance of having a choice in where they work, according to the ATAWW Survey. In fact, 83% of respondents said that remote work flexibility is very important to them; and 55% said they would likely seek a new job if they lost the ability to work remotely.

Clearly, those firms maintaining hybrid, remote, and flex-time benefits will have a competitive advantage in acquiring and retaining top talent in this tight talent market. Not surprisingly, in the five years since the pandemic, workers have developed new habits and schedules that enable them to achieve greater work-life integration; 93% of respondents said they feel work-life integration has improved with remote work options.

Today, accounting firm leaders who embrace a one-size-fits-one approach to remote and flex work arrangements could more positively influence firm culture, productivity, and morale by empowering their talent to choose the best and most effective work environment for their day. Instead of RTO mandates, leaders could implement adjustments to incorporate remote management techniques.

The need to outline clear expectations

It is important to clarify what is expected of each employee, because when working at different times or in disbursed locations, the lack of face time can leave some leaders wondering about team member productivity. To ensure productivity levels stay high, leaders need to clearly communicate:

• • • expected team member output, deliverables, or results
    • specific due dates
    • clear response time expectations to email, Teams messages, and voicemails
    • participation guidelines for remote team meetings (cameras are on, unmuted and speaking up, chatting, facilitating portions of meetings)
    • protocols for communicating during normal, agreed-upon work hours as well as changes from the expected normal hours
    • ways to communicate capacity and move past barriers in completing work
    • supervisor/assignee communication expectations
    • expectations for skill development and elevation into higher level work
    • guidelines for keeping calendars current and specific

Establishing clarity around these expectations, leaders can then track and benchmark performance against them instead of measuring less-reliable metrics like time-entered, face time, or keystrokes.

An RTO mandate may feel like a simple way to solve people-management challenges, but it’s likely to have significant unintended consequences on engagement, productivity, motivation, and ultimately, talent retention. Instead, leaders should develop new management strategies that include clearer expectations that can empower employees to produce their very best in both their work lives and their personal lives no matter where or when they are working.

You can find out more about��the talent challenges facing tax & accounting firms��here.

Recently, I spoke with a midsize accounting firm that had spent more than $100,000 on organizational resilience initiatives in 2024, and while firm leadership believed it was successful and wanted to keep momentum going, they were uncertain of their next steps. When I asked what metrics they used to measure success, they admitted they had only tracked attendance and word of mouth feedback.

If this sounds familiar, you’re not alone. However, this is precisely why many companies fall short in achieving their desired outcomes.

In this final installment of our three-part series on organizational resilience, we’ll explore the return on investment (ROI) you can expect when you intentionally invest in transformational solutions to foster resilience within your company. We will also look at two companies that are benefiting because of their previous investment in organizational resilience.

What are the transformational solutions?

Many professionals dream of the perks offered by companies like Google and often view anything less as inadequate. However, companies can thrive without ping-pong tables in the office breakroom and free bagels in the morning. What employees truly want is balance, demonstrated in time off from work for family and a flexible work environment that genuinely supports them. “You have to meet people where they are,” says Mariya Rosberg, Head of Americas Banking and Financial Services at management consulting firm .

What employees truly want is balance, demonstrated in time off from work for family and a flexible work environment that genuinely supports them.

Transformational solutions provide focused, consistent and ongoing support that enables employees to perform at their best. This can include group programs, coaching, training sessions, workshops, and team-building events. The key is sustained effort — one-off happy hours and 30-day walking challenges won’t cut it anymore.

Oliver Wyman launched a group program for women in their Corporate and Institutional Banking practice, designed to address the common challenges that their professionals face. The program provided practical tools to help participants manage both their careers and personal lives more effectively. “We invested in this program because we genuinely care about our people and want them to feel supported,” says Rosberg. “I also liked the idea of creating authentic environments for our team to connect and discuss issues that supersede engagement or rank.”

(LSHV), a legal non-profit that serves low-income individuals, took a different approach as its leaders launched a firm-wide program that specifically addressed attorney burnout. “Burnout is a constant concern in the legal profession, and we saw a group program as the most effective way to support our staff,” says Christa Ring, Human Resources Director at LSHV.

While both organizations implemented group programs, their goals, budgets, and cohort sizes varied. However, that’s a good thing — each devised a customized strategy that led to targeted execution and meaningful outcomes.

What to consider as a success

In the previous article, I shared a simple math scenario in which ROI could be measured through retention. However, many other metrics also indicate success, such as reduced sick days, increased revenue or margins, lower attrition costs, higher job satisfaction, and improved ability to handle competing demands. Subtle improvements, such as better presenteeism, communication, stress management, and confidence, are also valuable indicators of success.

Take sick days, for example. Imagine a managing director nearing burnout who takes two days off due to illness. They likely return feeling behind and disconnected. In contrast, with proper coping strategies implemented through organizational resilience programs, that same director may still take time off but would likely recover faster. More importantly, they would return feeling refreshed, better able to prioritize, and more capable of asking for help when needed.

LSHV’s Ring shared an example of an attorney struggling with severe burnout who was on the verge of quitting. Just weeks into the program, this attorney experienced significant improvement in mood and morale, benefiting from the tools provided in the program. While not every investment yields immediate results, this case highlights the direct impact a thoughtfully designed program can have on employee well-being and retention. “After surveying our people, the majority felt their coping skills improved and that they were equipped with better tools to handle challenges,” Ring explains.

Transformational solutions provide focused, consistent and ongoing support that enables employees to perform at their best.

This outcome is common in programs that are focused on building organizational resilience. Rosberg, of Oliver Wyman, witnessed a similar experience. “One of the most notable observations was participants recognizing they had more control, even when faced with challenges and hardships,” she says.

At Oliver Wyman, post-program surveys showed that participants felt they gained clear tools to reframe stressful situations and improve their boundary-setting skills. Rosberg also mentioned how participants found relief in their newly founded ability to openly discuss sensitive topics with colleagues, which fostered a supportive working environment. “In the long run, I see this as a way to build diversity in our pipeline.”

Success in these programs occurs when both the employer and employee benefit. It doesn’t have to look a certain way externally; it simply requires meeting the needs of both parties. One additional success both Rosberg and Ring noted is the longevity of the investment, as employees continue to reference and benefit from the original program months and years after its initial launch.

When measuring the success of an organizational resilience program, two key points are important. First, not all employees will engage fully. “Keep in mind that not everyone will practice or internalize the strategies,” Ring cautions. “But even if a few employees achieve better balance in their lives, we’ve succeeded.” Second, success is an ongoing process that requires continuous effort; however, once the initial momentum is built, it’s easier to maintain the benefits achieved.

Making organizational resilience your company’s reality

Organizational resilience goes beyond quick fixes — gone are the days when a $150 massage gift card or a team bowling event could save your workforce. It’s about genuinely supporting your people through challenges and not ignoring them. In order for your organization to thrive in the next five to 10 years of uncertainty, now is the time to act. Here are few key steps you can take now:

1. 1. 1. Finalize your budget and intentional goals.
      2. Develop a strategic plan that addresses your top priorities and incorporates the key decisions from earlier in this series.
      3. Get the support needed to achieve a positive ROI.

While this may feel like an additional burden given all your company’s existing challenges, it’s essential. You can’t wait for talent to leave or for bad press to surface — you need organizational resilience now. If you’re still unsure how to proceed, reach out to a well-being consultant who can guide you through the process and ensure your company achieves the ROI you’ve been striving for.

Cultivating a culture of organizational resilience doesn’t have to be a daunting undertaking — it can be an easy win-win.

You can read the complete 3-part��Organizational Resilience series, here.

The first step towards that change is already happening now: initial adoption. While 85% of legal industry respondents believe GenAI can be used for legal work, this adoption is happening cautiously, according to the recent Generative AI in Professional Services Report from the Thomson Reuters Institute. About one-quarter of law firm and corporate legal department respondents have used public GenAI tools such as ChatGPT. While industry-specific GenAI tools have been slower to come to the market, more than half of legal respondents anticipate using them within the next three years.

As part of charting the future of GenAI, we have been talking to ��������’s technology and product experts, including members of TR Labs, as well as a range of experts across industry and academia. Those conversations have underlined factors that firms should be considering as they deploy GenAI across their practices.

Training users on getting the most out of GenAI tools

In Fall 2023, Harvard Business School and the Boston Consulting Group (BCG) conducted a study titled , in which researchers tracked 18 standard consulting tasks with more than 700 BCG consultants, some of whom were given GenAI to help with the tasks and a subset also received prompt engineering training. The control group completed tasks using traditional methods. On average, the study found, those who used GenAI completed on average 12.2% more tasks, 25.1% more quickly and with better quality answers. Those who received training saw a 42.5% improvement in scores versus the control group. Even the group without training saw a 38% improvement.

The study’s authors highlighted two categories of AI users who performed better than others in the test cohort: “centaurs” who systematically divided tasks into those more suited to AI and those that were better completed by humans; and “cyborgs” who constantly interacted with AI and integrated it seamlessly into each task.

However, productivity gains were not universal. The study also found that consultants who used GenAI for tasks to which the technology is not suited (e.g. quantitative data analysis and generating accurate and actionable strategic recommendations) were 19% less likely to produce correct solutions compared to the control group.

Therefore, it’s crucial to factor in which parts of the legal workflow are more amenable to automation. Some tasks, such as content generation or summarization, lend themselves naturally to GenAI applications, while others, especially those that require more complex or higher-level reasoning, are better handled by humans.

“It’s like having a dictionary and being able to look how to spell all these words, and then complaining that the dictionary isn’t very effective as a fly swatter. Well, it can do that, but that’s not really its role,” says Gabriel Teninbaum, Assistant Dean of Innovation, Strategic Initiatives and Distance Education at Suffolk University Law School, adding that the same challenge comes up with large-language models (LLMs). “I think because of their design, because they’re so easy and intuitive to use, people have this idea that it’s an information machine that knows no limits. The reality is, it has some things that it can do well, and it has some things that it can’t do well at all.”

Picking the right tool for the job

Data privacy & security is paramount — When asked what is keeping them from adopting GenAI, many legal practitioners point to the data. In fact, 68% of legal industry respondents to the Gen AI in Professional Services Report pointed to data security concerns as a barrier to adoption, while 62% said the same of privacy and confidentiality. Particularly given the confidential and sensitive nature of legal work, clients need to be assured that their data is not being used by GenAI tools in unforeseen ways.

This underlines an important difference between most generic GenAI tools and legal-specific solutions. For instance, ChatGPT requires users to opt-out if they wish for their content not to be used to train OpenAI models. Legal-specific tools, however, are often architected with privacy and security at the fore – although firms should check, because even legal products vary.

Answer accuracy & fighting hallucinations — Once privacy and security of data is accounted for, GenAI users need to ensure that the answers generated are correct. Over the past 12 months, stories have come to light demonstrating how things can go wrong when AI tools like ChatGPT hallucinate fictitious case law. Even when an answer is not hallucinated, an answer may not be 100% accurate if the questions posed are interpreted incorrectly by the LLM or are incomplete. Some courts have responded to cases of fake citations appearing in legal briefs by issuing cautionary guidance about relying too heavily on AI-generated output.

There is an important distinction to draw though between generic tools such as ChatGPT and Microsoft Copilot and products that have been specifically developed for lawyers. The former draw information from across the internet and are not trained specifically to deal with legal questions. Moreover, they are not grounded in authoritative and up-to-date legal content, and they tend to make things up when they don’t know the answer.

“I think because of their design, because they’re so easy and intuitive to use, people have this idea that [GenAI] is an information machine that knows no limits. The reality is, it has some things that it can do well, and it has some things that it can’t do well at all.”

— Gabriel Teninbaum

Conversely, it is possible to significantly improve output using legal-specific solutions. For example, retrieval augmented generation (RAG) is a technique that can be used to enhance the accuracy, relevance, and depth of an AI’s answers by essentially giving it access to a verified reference library. In the context of a legal query, giving an AI access to case law, legislation and authoritative secondary source material can help to ensure that the answers generated are tailored to the legal context of the query.

“We found if we could find the right content to give it context within the prompt, it was right almost 100% of the time,” said Joel Hron, the head of TR Labs. “The problem is much more about interpreting the question and finding the right resources that the model needs to answer the question.”

Importantly, the best tools are guard-railed so that the AI tells you when it does not have an answer to your question.

Humans in the loop — Despite technology advancements, it remains critical for human checks to be built into every legal workflow, as ultimate responsibility for client care cannot be delegated to an AI. Lawyers should aim not to reproduce the work that GenAI performs, but instead find ways to provide value on top of GenAI’s output, leveraging their own specialist knowledge.

Wendy Butler Curtis, Chief Innovation Officer at Orrick, Herrington & Sutcliffe says using GenAI is like having “a wonderful over-eager intern or a great first-year associate” doing the work. “You’re going to get a first draft, not in eight hours from that person, but in minutes,” she says. “But the problem is, you don’t know where it’s going, where it’s right, and where it’s wrong.”

As a result, she noted that the tasks where she likes to use GenAI are the ones where the wealth of human experience can have the most impact. “If you’re doing a deposition outline for me in a deposition that I’ve done 100 times, it’s great from moment-go because I don’t have to think to verify it. I can say, ‘That’s good, that’s wrong, it’s missing these three things.’ But if it is not something that I know inside and out, now I have to figure out, how do I verify it?”

Embracing a hybrid future

GenAI is becoming more accessible to legal professionals every day, with applications being baked into work processes spanning from litigation to transactional work. As this occurs, more and more legal professionals will need to move from the conceptual questions around how GenAI will impact their work into the more practical questions of how to use it today.

Responsible and ethical GenAI usage is possible, but while those who do not adopt GenAI may risk being left behind, those who use GenAI without care also risk over-relying on the technology for tasks it may not be suited to perform, leading to less accurate and less efficient outcomes. The true winners of GenAI will be those who pick the right tools for the right jobs and take the time to understand which tasks suit GenAI well, and then supplement those tasks with accurate and strategic legal reasoning.

In coming weeks, this series, , from the �������� strategy team and the Thomson Reuters Institute will continue to explore the practical impact that GenAI is likely to have on legal professionals working in law firms or in-house.

“Any organization has two manifestations: the formal organization with its rules, procedures, and organizational diagrams, and ‘what actually happens’,” said Dr. Roger Miles, faculty lead of the banking industry body U.K. Finance’s conduct leaders’ academy and a researcher and consultant on behavioral risk.

“Discovering the latter exposes problems and risks but senior managers often have a determinist view and wrongly assume that what their rules say is what everyone does,” Miles noted.

Hybrid working��hiding problems

Hybrid working became normal practice at many firms as the COVID-19 pandemic wound down. Staff liked being spared a commute and enjoyed the greater flexibility to accommodate childcare and other needs. And many firms saw the potential to reduce the amount of expensive office space that they rent.

Hybrid working remains popular with employees. With people no longer in the same place at the same time, managers depend on video-conferencing platforms such as Zoom, Webex and Microsoft Teams; however, without the necessary management skills, problems can go unnoticed or unchecked.

“In online meetings, you lack important clues — body language, other visual signs, conversational nuances, significant silences — that would tell people in the same room someone’s holding back their true opinion or has some other difficulty,” Miles said.

“It’s easier to query something in person, especially when you sense that somebody else may support you,” he added. “Virtual working can mean more doubts are suppressed, which is the opposite of the ‘speak up’ culture” that the United Kingdom’s����(FCA) expects.

SVB & operational risk

Failure to challenge matters online has been suggested as a factor in the collapse of Silicon Valley Bank (SVB) because underlying causes included unhedged risks from rising interest rates, a narrow client base, and a sudden pullout of deposits. However, some flagged SVB’s enthusiastic adoption of remote working, which most staff enjoyed. A����mentioned the difficulty of challenging decisions like interest rate risk over Zoom.

SVB’s 2023��, released in February, acknowledged that its work-from-home (WFH) arrangements created operational risk. The report said the negative effects of WFH that SVB could experience included systems access problems, cybersecurity or information breaches, and work-life balance problems reducing productivity or causing significant business operations disruptions.

From the C-suite to call centers, hybrid working risk-reduction is not helped by the way many managers in finance are developed, and the focus often is on performing a role, not how to oversee others. Research by the , found that despite the prevalence of managing via online channels, there was scant training for it.

Lack of training, online meetings where most attendees keep their camera and mic off unless called to contribute, and a subconscious ‘familiarity breeds contempt’ attitude creates problems. Sensitive online meetings can be overheard as people take calls in coffee shops, while walking dogs, or on a train. Hybrid working may also contribute to the use of unauthorized messaging services for work.

Further, hybrid working affects staff development and meeting FCA training and competence requirements, as in-person instruction entails getting the instructor and trainee into the office on the same day. Anecdotally, one problem is that upper-middle tier managers at some firms can be absent even on core office days. The ��regarding remote or hybrid arrangements require firms to take into account the possible detrimental impact on training, and there are clear shortcomings.

“We all learn in unconscious ways, and seeing your manager operate on a day-to-day basis in person will undoubtedly influence how we learn at work,” said Anthony Painter, director of policy at CMI. “A survey of managers late last year asked about onboarding new employees, and 7-in-10 told us they found onboarding new team members and building relationships at work harder in a hybrid work setting.”

Pushback from firms

The Lloyd’s insurance market is among those pushing back against three days in work patterns and wants Monday restored as an office day, ideally aiming for full-time attendance. Some investment banks always viewed hybrid working as an unloved post-lockdown necessity that got staff back in the office at least part-time without triggering mass resignations in a tight labor market. With economic conditions harder, firms’ attitudes started stiffening last autumn.

Staff resistance to full-time attendance may thwart firms. Several banks have repeatedly told employees to be in the office full-time since late 2020, but logic would dictate that you do not have to keep ordering people to do something if they are already not doing it. A����found that over one-third of staff at London law firms, and nearly half in North America, had ignored calls for greater office attendance with firms reluctantly conceding on the issue.

A call back to the office can weed out those abusing the concept of being managed remotely — sometimes referred to as ZEUS workers, meaning those who put in zero effort unless supervised. One company recently paid staff a lump sum towards the travel costs of returning full-time; later, non-attendees’ excuses included spending the money on clothes and disliking commuting approximately five miles. Another non-attendee who asked whether the firm would install��air-conditioning first had to be reminded the office had always had it.

Reluctance to return to the office can indicate serious diversity and cultural problems as well, as it may really be about avoiding unpleasant people. Last month, a recruitment company reported that workers over 55 years old were the most likely to experience deliberate exclusion by colleagues. Women over 45 were twice as likely to face sexist behavior than younger ones and one-third had been bullied.

“If your colleagues are deterred from coming to the office because of a hostile environment, you have bigger problems than the balance between in-person or remote working,” Painter said. “Such a culture is fundamentally corrosive and will impact the well-being and performance of your staff. It will also exclude many talented people, whether over 45 or under 45.”

Other workers may find the office less attractive now��that fewer people are there.��In March, reported that 52% of managers found WFH meant workplaces, especially at larger firms, were lonelier; and 47% found work more stressful than in pre-pandemic times.

As businesses become more human-centered, approaches to collaboration in this time of mixed approaches to work — in-person, remote, or hybrid — are an ongoing question. While some organizations are strongly encouraging a specific number of days in the officer per week, others are still fully remote or leaving it up to the individual needs.

For example, members of the �������� Equity, Diversity & Inclusion advisory board recently shared how they are navigating hybrid work, returning to the office desires, and balancing preferences in both in-person and remote work amid very diverse work styles and backgrounds among employees.

With the reality that the legal and tax & accounting industries operate on personal connections, which, generally speaking, are forged more efficiently in-person, two members of the advisory board outlined their firms’ current guidelines to hybrid work. First, they strongly encourage all lawyers to show up in the office on specific days of the week with flexibility in choosing a third day in the office. This has allowed people to maintain their desired flexibility with structure without diluting personal connections and cultural norms.

Second, they allow employees to work where they need to be, based on a descending order of priorities: i) working where the employee needs to in order to meet the client’s needs; ii) working where the business and the team want; and finally, iii) working where the employee wants. The benefit of this approach has helped employees pivot from self-first paradigm during the pandemic to more business need-led decision-making.

As legal and tax & accounting employers work through the right balance between working in the office and elsewhere, it has become evident that remote work does not necessarily mean less engagement, according to a three-year study of knowledge workers by , Product Management Director at , and research partner , a professor of management at McCombs School of Business at the University of Texas at Austin. More specifically, insights from their research revealed that remote meetings appear to be becoming a lot more natural and effective, mostly because meeting length shrunk by 25% and had fewer attendees between 2020 and 2022, with the proportion of remote meetings that are one-on-one increasing from 17% to 42%. Also, remote meetings seem to be mirroring in-person interactions a whole lot more due to their spontaneity and size, the study found.

Getting the most out of meetings

While the approach to work ultimately will vary depending on the needs of the organization, there are key lessons to be learned from the remote work experience over the last three years. Tolliver and Brodsky shared how their clients using these insights, including:

• • • Being intentional about meeting culture — Tactics, such as setting agendas for meetings, create meeting norms among team members and ensure there are opportunities for people to speak up. These have become important elements of productive meeting culture.
    • Analyzing technology fit — Be mindful about collaboration and make sure there is forethought in what technology is being used and for what task. Sometimes certain tasks are better done via e-mail rather than spending time in a meeting.
    • Building trust — For a manager, building trust with your employees, especially among those who work remotely is critical. First and foremost, make work and promotion decisions based on work outcomes and impact, not presence in the office.
    • Experimenting & using data — One of the best tactics organizations can utilize is constantly experimenting in order to try new approaches, whether it’s with employees or clients. During this process, organizations should collect data, adjust, iterate, and experiment again. The right solution won’t occur on the first try, of course, but by using data-driven qualitative and quantitative analysis, organizations can keep working to improve.
    • Being mindful about how time in the office is used — This is particularly important for collaborative reasons. Having employees commute an hour each way, just to sit in the office and perform the exact same tasks that they would do at home is not ideal. Managers should schedule most team meetings on in-office days. For lawyers, this may be harder to control given the nature of client demands, but it is worth making the effort.

As the future of work shakes out, balancing between in-office work and remote work will compel organizations to lean intentionality toward collaboration and more inclusive meetings to better gain an edge in increasing employee satisfaction (and therefore, productivity and retention) going forward.

And much data underscores that point. For example, recent studies highlight a strong correlation between ; and there has been other realized financial benefits, such as a .

Over the last few years, ESG is sometimes presented as an exciting trend that will wane over time, but others believes at some point, ESG will be normalized as how business is conducted. In fact, this outcome is more likely because ESG has become an expanded framework through which to conduct a competitive analysis, just like the SWOT (strengths, weaknesses, opportunities, and threats) tool did decades ago. A key reason for this is that looking through an ESG lens allows for the identification of new or expanded risks and opportunities through regular consultation with an increasing list of company stakeholders.

One head of sustainability at a major bank states that investors “are very risk-based, but the landscape has really shifted to risks and opportunities. Risks are still the bigger part of the pie, but like stakeholders, investors are asking like questions like, ‘How is the bank supporting the [climate] transition?’”

Analyzing the opportunities around ESG will be both industry- and company-specific, but generally, more than half of executives said they . Some of these opportunities, include improved return on investment ROI and elevated brand reputation, in addition to risk reduction. Indeed, many of these opportunities are multifaceted in areas such as:

Financial — Numerous sources, including the studies cited earlier, note the financial benefits of making ESG investments. In addition, ESG management and transparency have and should be incorporated in overall corporate strategy, and quarterly earnings guidance.

Employees — People want to work for a corporation about which they generally feel good. In addition, there is a growing body of evidence of a strong correlation between retention and ESG. “Top employers, as measured by employee satisfaction and attractiveness to talent, have significantly higher ESG scores than their peers and suggests that ESG performance can help companies both improve employee satisfaction and attract prospective employees,” according to recent .

Branding — A strong commitment to ESG produces a positive public perception for companies. According to the , there is a direct correlation between an organizations social stance and its appeal to consumers. Further, noted that members of Generation Y and Z are “more likely to consider ESG in relation to trust, advocacy, and purchasing from companies.” Also, “social and governance factors, such as a commitment to human rights, diversity, and transparency in business practices, seem to be more of an influencer than environmental factors when it comes to purchasing decisions.”

Of course, there are , and the ongoing complexity in the regulatory landscape and current lack of clarity in definition and standards, has thus far prevented the full realization of opportunities around ESG at the moment. However, these factors likely will lessen over time, possibly within the next three years.

Perhaps the most pervasive negative view of many critics is the one that holds that ESG is a temporary side-show for public relations purposes because it goes against Milton Friedman’s view of a public company’s while “conforming to the basic rules of society.”

And, yes, there is inherent conflict between doing well financially and doing good in the short term, but the conflict will decrease over time. Rachel Teo, head of sustainability at , one of three investment entities in Singapore that manage the Government’s reserves, points out that between the short and long terms will diminish because the cost and pressure by governments, investors, and societies to transition their businesses away from being negative forces will get priced into company share prices in the markets over time.

Another headwind adversely working against companies embracing ESG opportunities is how the weight of the pressure from multiple stakeholders impacts short-term decision-making by senior executives and corporate directors. “C-suites and boards typically make ESG decisions around what pressures they are seeing because of the current lack of clarity around ESG issues,” says R Mukund, CEO of��. “Their activities are driven more by what pressures those decision-makers are feeling at the moment most acutely.”

Whatever the headwind, ESG’s staying power is being driven by a multiplier of forces occurring simultaneously. The negative aspects around and transition costs of ESG will dissipate over time, as Teo argues, because they will be priced into the market over time. As for the ESG critics who hold Friedman’s view, may be society’s basic rules are changing because of humanity’s expectations around public companies’ positive role in society are quickly evolving.

The reason for the consternation is that since 2020 the office working norm has been turned on its head, and it’s been too long to go back to normal. In fact, normal has pretty much dematerialized. So, instead of getting back to a normal that is no longer possible, the RTO has become a��wicked problem��for many leaders.

Yet, a wicked problem isn’t evil in itself. Simply stated, a wicked problem is one that cannot be easily fixed and for which there is no single solution. However, it’s more than that. A wicked problem is the kind of problem that boasts unrecognizable, incomplete, contradictory, and insidiously changing requirements. Further, the unpredictable nature of a wicked problem means that it is often difficult or impossible to divine a solution in which people have much confidence. Complex�� result in efforts to solve one aspect of the problem, revealing or creating other problems.

The RTO is the ubiquitous wicked problem. The flexibility in work location that lawyers and accountants are able to enjoy only serves to amplify the options and number of decisions leaders must make. It also means that leaders who desire an RTO must figure out how to do so without spurring resentment and resignations. There are numerous reports of accountants and lawyers threatening to quit if they are forced to come into the office when other employers aren’t making that a requirement. And, of course, the changing economy may affect that.

The wicked nature of the RTO problem is really about leadership. A leader’s efficacy, especially in difficult times, affects how team members feel about their work and the organization more broadly. Thus, although leaders may be exhausted by the plethora of return-to-office issues, for their team to be successful, they need to be mindful of each decision’s impact.

It’s not just the answer to how many days per week, the mandatory versus strongly suggested nature of the return, who gets exceptions from what, RTO incentives, and whether the return is universal or task dependent. Everything a leader does — including how they do it — creates, reinforces, or destroys morale and culture.

A 7-step process for leading an RTO

To effectuate change that is not necessarily welcome, leaders must cultivate buy-in among the managers, professionals, and staff within the firm. Here’s how they can do it:

1. Clarify why — If leaders accept that the hard-fought education level of lawyers and accountants is evidence of commitment and an intrinsic motivation to serve clients, leaders must also accept that industrial-revolution style command-and-control concepts such as timecards and surveilling the factory floor don’t apply to their workplace. Add to that the fact that technological advances of recent years now mean that people can work from just about anywhere.

So then, why do leaders care where people work? As a leader, you must be able to answer this question so that your people don’t complain that the RTO is a perfunctory time-waster. Identify meaningful benefits such as the opportunities for conversations in hallways or over lunch, and in face-to-face meetings range anywhere from nice-to-have to critical to firm culture, mentoring, and the functioning of the team. Be specific, thoughtful, and consistent in implementation of the RTO and other policies to eschew skepticism and resentment.

2. Create safety & invite discussion — An important aspect of culture is whether team members feel safe enough to express concerns, question leadership, and offer alternative solutions. Foster discussion with team members so that you can address any concerns. Not only does this lessen the sting of an RTO for the resisters and increase buy-in for all, but you convert the RTO problem into a team problem.

3. Ease into the RTO — Obviously, give plenty of notice that an RTO is imminent. Consider easing into the RTO by requesting cameras on during virtual meetings — and be sure to follow this example yourself. This practice is especially beneficial in the absence of a full RTO or if some workers remain fully virtual. No one wants a detached culture.

4. Establish expectations — A leader’s clarity concerning expectations is critical to trust and perceptions of fairness. Even before the RTO, set core hours for meetings and availability, team-wide work-from-home days, and time without meetings.

5. Address the real problem — An RTO is not a substitute for trust. You either trust team members to do the work or you don’t. If the work is not getting done, address that. Consider that the struggling team member may need training, coaching, or other support. Don’t conflate the cause of performance issues with working from home. Answering the question of Why? with any response that smacks of distrust would be toxic.

6. Be flexible and adopt a problem-solving mindset — Remember, RTO is a wicked problem, which means that the next challenge may surface before the next corner. Leaders must remind themselves that RTO is an ongoing challenge and avoid wedding themselves too intensely to a particular aspect of their RTO strategy. Whatever comes up, avoid frustration by focusing on finding the next solution. Accept that RTO and the balance between working from home and the office is likely to evolve.

7. Be calm, patient, and make the next decision — When the need for change or an exception does arise, stay calm and patient. Your demeanor is one of the most important determinants of team culture and success. Make the time to listen, consider, and respond clearly and decisively.

Leading through change isn’t always easy. That said, if you trust this seven-step process and your team, then both you and they will be more cohesive and effective. More than anything, an RTO effort is a time when insightful, decisive leadership is crucial for success.

Even though remote work models are reported to improve employee well-being and job satisfaction, expand talent pools, and reduce long-held costs associated with infrastructure, there is further evidence these success drivers have also exposed employee isolation, deteriorating workplace culture and limiting organizational knowledge-sharing.

One of the frequent issues raised in remote and hybrid environments is the very real feeling of missing out. The loss of such in-person interaction as coffee meet ups and impromptu knowledge exchanges has diminished the sense of belonging and organizational purpose. This type of informal organizational knowledge-sharing is predicated upon relationship proximity that is defined by trust. In other words, the people with whom we typically interact, are those whom we are more willing to share with and learn from.

Rather than hitting the limit on organizational knowledge-sharing… the time is now ripe for knowledge-sharing behavior to be seen as central to innovation.

So what are the practical considerations for an organization whose historical and continued success is gleaned from knowledge-sharing behavior beyond knowledge capture?

Rather than hitting the limit on organizational knowledge-sharing (and despite organizations having largely focused on improving knowledge-sharing through information technology systems), the time is now ripe for knowledge-sharing behavior to be seen as central to innovation.

Understanding that most aspects of organizational sharing are based on experience and are largely rooted in undocumented (tacit) rather than documented (explicit) knowledge, it is knowledge-sharing behaviors that are embedded in organizational routines, processes, and structures that improve the weakened relational ties unearthed by remote work. Organizations that invest in and strengthen the development of knowledge-sharing behavior through relational networks contained within teams to create a more matrixed and cross-functional team approach influence cooperative communication that broadens the various dimensions of internal knowledge expansion.

This approach will form interpersonal networks of common sharing as a personal goal and characteristic. This also opens up an organization to social knowledge-sharing systems that are not solely defined by proximity.

Improving knowledge-sharing

Effective models for improving knowledge-sharing behavior and outcomes are commonly studied across academic and corporate circles. These studies are consistently focused on fostering a knowledge-sharing mindset, creating space or ways for sharing to happen, adapting to different forms of knowledge-sharing leadership values, and formalizing the sharing process.

There are a number of ways to improve knowledge-sharing behavior within an organization, and most recognize that people are central to the success of any knowledge-sharing effort. Through their social connections, employees view themselves as knowledge contributors and as such, an organization should make the most of this view. Indeed, some ways to better foster this view include:

1. 1. Acknowledging self-belief and that everyone has valuable knowledge to share — Do this through team debriefs and learning opportunities, and by developing informal social networks. Employees believe in social leaning as a key driver in their success.

   2. Designing ways to create mentoring as a knowledge-sharing scenario — Whether through project teams or organizational participation, this strengthens and leads to cross-functional learning.

   3. Enabling people to regularly share knowledge — This forms consistent habits and feelings of purpose and contribution.

   4. Considering that your peers are a collective network of knowledge — Reach out regularly to identify and solve problems that innovate and improve process.

Organizational knowledge-sharing is now positioned to evolved beyond the limits of technology structures. How an organization perceives and values what people know can offer further insight into the discipline of knowledge-sharing as a core institutional value — and one in which there are no limitations.