MSI Pulse: Insights from the legal and accountancy professions (Edition 1)

In this issue... 

AI and Accountancy 

– Friend or Foe? 

Interview with 

Yaron Brook - 

In Pursuit of Wealth 

Are “you” relevant 

in these changing 

times? 

‘Client First’ 

should not mean 

‘Client is King’ 

Why law firms 

can’t compete 

01

Welcome 

to MSI Pulse 

Welcome to the first edition of 

MSI Pulse, our thought leadership 

publication designed to help you 

keep your finger on the pulse of 

developments and current thinking 

in the world of professional services 

and beyond. 

At MSI Global Alliance, we hold regular 

conferences and events where we engage 

speakers who are insightful and challenging 

and who deliver sessions that are thought 

provoking, topical and inspirational. In the spirit 

of collaboration and sharing, we have produced 

MSI Pulse that brings the views and insights 

of our speakers and other contributors to 

a wider audience. 

This first edition focuses on professional services 

and particularly the world of finance. However, 

much of the content will resonate with the 

broader business community, so please feel 

free to share with colleagues and clients. 

Tim Wilson 

Chief Executive, MSI Global Alliance

In this 

issue... 

2 

AI and Accountancy 

– Friend or Foe? 

5 


Yaron Brook - 


Are “you” relevant in 

these changing times? 




Why law firms 


8 10 12 

MSI Pulse 

1

AI and 

Accountancy 

Friend or Foe? 

asks James Moffatt of MindBridge Ai 

The drivers for change in the field 

of accounting are real. Regulators 

are taking an increasingly tough 

stance on audit failures, and too often 

today’s headlines are highlighting 

how easy it is to fall from grace and 

be trapped in the midst of an auditing 

scandal. This threat of bad publicity 

and litigation has made auditors and 

organisations more fearful than ever 

of errors and has even caused some of 

the biggest accounting firms to refuse 

to work with certain companies. 

This caution is understandable as organisations 

are required to retain enormous amounts of 

data, and accountants are given the heavy 

responsibility of processing it correctly. While 

accountants strive to provide assurance and 

value, the current techniques aren’t always 

giving them the right results. Outdated sampling 

and testing processes are often to blame for 

missed errors and material misstatements, and 

these are issues that need to be examined. 

Artificial Intelligence (AI) can help to solve many 

of the issues related to the auditing process. 

Not only can it analyse all of the data near 

instantly, it can assess the entire transaction 

and shine a light on all of the risks in the data. 

This means that organisations can rest easy, 

knowing that it will identify any unknowns 

lurking in the data and allow accountants to 

focus on solving the problems, and reducing the 

time spent sample checking. Rather than taking 

over the role of the accountant, AI instead can 

help to redefine the very definition of reasonable 

assurance and empower finance teams to deliver 

added value, and leave the number-crunching to 

computer-sized brains. 

2 MSI Pulse


3

AI won’t replace 

auditors, but auditors 

that use AI will replace 

those that don’t. 

Breaking Barriers 

Moving forward 

The most progressive firms have 

identified AI capabilities as an 

important differentiator, but still 

appreciate that the best practice is 

a collaborative approach, one that 

augments human and artificial 

intelligence. In the same way that 

the human brain cannot compute 

hundreds of thousands of data 

points in a split second, a machine 

cannot understand the subtle 

dynamics and context of realworld 

accounting. In combination, 

an accountant fueled by AIpowered 

data analytics is turbocharged 

to make faster, more 

accurate decisions, while having 

more time to put providing 

guidance, value and insights at 

the heart of their service. 

Although proactive firms 

are deploying AI to help 

drive efficiency, reduce risk 

and increase quality in their 

compliance processes, there still 

remains hesitancy in some parts 

of the market. It’s a reticence 

that’s driven by myth, as often 

the adoption of AI tools remains 

hamstrung by the idea that they 

are costly, complex and difficult 

to implement. The fears are 

misplaced. 

There is a misunderstanding 

and misconception regarding 

the perceived black-box nature 

of artificial intelligence. Good 

technology is easy to use, 

transparent and understandable. 

AI analysis platforms ought to 

be designed to expose exactly 

why and what, compelled by 

the system to mark transactions 

as risky. They’re supposed to 

demystify AI and be intuitive to 

use, not be an additional puzzle 

to crack. If the AI isn’t explainable 

then the right solution hasn’t been 

implemented. 

The cost of AI is often another 

barrier to its adoption, but the 

return on investment in time 

savings and assurances far 

outweigh the initial costs. The 

advent of cloud-based services 

has also tempered this argument, 

as this has made many tools 

more affordable and accessible 

to all. Bigger firms have often 

benefited from the idea that AI is 

too expensive to implement, as 

some smaller companies believed 

themselves to be hindered by 

budget and therefore never 

explored how they might apply 

it. This however is no longer the 

case, and everyone now has the 

opportunity to harness the power 

of AI and improve their processes. 

In the age of AI, each company 

must become a technology 

company in order to defend and 

grow their market, including 

the financial industry. It’s time 

to forge forward and recognise 

that accountancy will actually 

thrive with the rise of artificial 

intelligence, unearthing more 

of the risk in financial data, and 

providing greater assurance than 

ever before. AI won’t replace 

auditors, but auditors that use 

AI will replace those that don’t. 

Many industries are experiencing 

the benefits of technological 

advancements, and accounting 

firms shouldn’t overlook not 

just the functional benefits AI 

can bring, but the reputational 

benefits. Auditing, in particular, 

is an area in need of a reputation 

refresh. Using high technology, 

auditors can regain the trust and 

confidence of their clients and 

ensure that no stone remains 

unturned, with minimal amounts 

of manual assessments. With the 

pressure rising on auditors and 

organisations to be fast, accurate 

and competitive, AI couldn’t have 

arrived at a better time. 

Author: James Moffatt is Director of Sales, Western Region, Audit & Assurance at MindBridge Ai, a company committed 

to changing the world by building revolutionary solutions to analyze financial data through advanced artificial intelligence 

and machine learning techniques. Prior to MindBridge, James was President of Aspire Advisory, helping executive teams 

develop strategies to drive revenue, and President of Syspro Canada, an ERP solution provider servicing the mid-market 

manufacturing sector. As a CPA in the technology industry, James has a unique perspective and proven experience on 

how AI is dramatically improving how accountants work. To find out more visit: www.mindbridge.ai 



Yaron Brook - 


Yaron Brook offers his views on the morality of 

the world of finance. A world-renowned speaker 

and bestselling author, Yaron is unfailingly insightful 

and challenging. 

Q: Why did you go into the world of finance? 

A: What appealed to me about finance was 

how scientific and reality-oriented it was. 

I realised how important finance was, both as 

a subject and as an industry. Simply put, you 

cannot understand our world today, you can’t 

understand why advanced economies are 

so prosperous or why we keep encountering 

economic difficulties, without understanding 

finance and financial markets 

The analogy I sometimes use is the circulatory 

system of the body. Finance is in effect 

the heart and the veins and arteries of the 

economy: they make sure the blood 

(the capital) gets to where it is most needed. 

A healthy economy, like a healthy body, 

depends on a well-functioning circulatory 

system. Economic progress and economic 

prosperity require a robust, functioning, 

vibrant, and politically free financial system 

that fosters the accumulation and efficient 

use of capital. 

Q: And yet finance is one of the most 

demonised, and regulated industries 

in the economy. Why is that? 

A: It goes back centuries. Aristotle, for 

instance, talks about money as barren: money 

doesn’t produce more money. If I give you 

seeds, you can plant the seeds, and they grow 

into something. But if you plant money in 

the ground, nothing happens. And so, there’s 

this perception that financiers are not doing 

anything useful or productive - they’re just 

transferring money around between people. 

You also have a view that comes out of 

Christianity that says it’s our duty to help 

others with no expectation of a return. This is 

what you can call the altruistic objection. The 

idea is that someone needs a loan, and our job 

is to help them - not try to profit off their back. 

So, these two ideas fuse into the belief that 

financiers are immoral parasites: they profit, 

not by doing something productive, but by 

exploiting people in need when their actual 

duty is to help those people without any 

expectation of profit. 


5

Q: What leads people to believe financiers are 

to blame for all the problems in the economy? 

A: Yes, and it’s our intellectual and political 

leaders who cash in on that plausibility by 

blaming every crisis, disaster, or problem on 

finance - such as the financial crisis of 2008. 

They never place the blame on the true source 

of the problems: central bankers, political 

intervention, government regulations. 

Something we always have to keep in mind is 

that we do not have a free market in finance. 

On the contrary, it is arguably the most 

regulated industry in America. 

Q: So, in your view finance is actually 

a morally good industry? 

A: Yes. Finance is fundamentally a moral industry 

because it is productive, on a grand scale. 

My standard of morality is what promotes 

human life and happiness, and a key component 

of that is producing the material values that 

human life requires. 

Financiers helped create Silicon Valley. Financiers 

help us buy the homes we live in and the cars we 

drive. Financiers help us send our kids to college 

and save for old age. Financiers help millions of 

small businessmen and women achieve their 

dreams. If you care about a rational individual’s 

well-being, then the only conclusion you can 

draw is that finance is a moral endeavor. 

However, the dominant moral code in our 

culture is altruism - the idea that morality 

consists not of creating the values your life and 

happiness require, but of sacrificing yourself 

to others. Placing others above yourself. Well 

financiers don’t sacrifice, they make money. They 

create wealth and get really, really rich. They are 

obviously not sacrificing themselves to others; 

they are pursuing profits. 

But if you think about it, this is really an 

indictment of altruism - not of financiers. If what 

financiers are doing is prospering by creating 

enormous value and dealing with other people 

win/win, then I would say that any supposed 

moral principle that denounces them cannot 

truly be a moral principle. If financiers have 

helped us live longer, richer, more enjoyable 

lives, then any code of morality that condemns 

them is committing a horrific injustice. 

We need to completely reorient how we think 

about morality. When we think about what it 

means to be moral, what should come to mind is 

not saints who wallow in the mud and champion 

poverty and suffering, but producers - people 

who pursue their own happiness by using their 

minds to create values. 

Q: With that in mind, how should 

the industry defend itself today? 

A: For the most part financiers don’t defend 

themselves and when they do it’s generally in 

abstract, economic terms: that they promote 

efficiency or help foster economic growth or job 

creation. It is rarely clear or compelling and it’s 

never put in moral terms. 

In essence, I think there are a few key steps 

required to change the way people think of 

finance. 

1. You need to be explicit about the moral 

standards we should use. If the standard 

we’re measuring financiers by is altruism, selfsacrifice, 

then of course they’re immoral. Instead, 

you need to say, in effect, my standard is each 

individual’s life and happiness. What’s moral is 

for each individual to strive to make his life as 

happy and successful as possible through his own 

rational thought and productive effort - dealing 

with others through mutually beneficial, win/win 

relationships. No fraud, no force, no sacrifices. 


2. You have to make the broader case for 

business and the profit motive. You need 

to help people grasp that wealth creators are 

doing something noble: they are creating the 

wealth that has lifted us from the stone age to 

the digital age, with each individual profiting 

according to the value that he creates. 

Extract from an interview with Yaron Brook 

by Don Watkins, with whom Yaron has 

coauthored Free Market Revolution: How 

Ayn Rand’s Ideas Can End Big Government 

and Equal Is Unfair: America’s Misguided 

Fight Against Income Inequality. 

3. You have to explain the productive 

role of finance in terms that people can 

understand. For example, I would say that 

venture capital is probably the area in finance 

that most people have a positive view of. 

And that’s because they can see the 

connection between what venture capital 

does and a positive result: here are the 

guys who are bringing us the Apples and 

Ubers of the world. Whatever your role is in 

finance, that’s what you have to strive to do: 

to connect your function or your industry’s 

function to people’s existing values. 

4. You need to be able to properly frame 

the real challenges that exist in your 

industry; above all, the way you need to be 

able to explain how government intervention 

causes genuine problems. 

If you do all that, you can change people’s 

views of finance. 

Biography - Yaron Brook 

Born and raised in Israel, Yaron served in the Israeli military intelligence before moving to the US and completing 

a PhD in Finance. He is a former university professor of finance, cofounder of BH Equity Research, a private equity 

and hedge fund and an author, podcaster and renowned speaker. He serves on the boards of the Ayn Rand 

Institute and the Clemson Institute for the Study of Capitalism and is a member of the Most Pelerin Society. 

To find out more visit: www.yaronbrookshow.com 


7

Are “you” relevant 

in these changing 

times? 

Jagdish Dalal, internationally recognised expert in Information Technology 

and Business Strategy, considers how professional service firms will need 

to be more risk taking and adaptable in these changing times. 

“Information technology 

and business are inextricably 

interwoven. I don’t think, anyone 

can talk about one without 

talking about the other,” 

said Bill Gates, a decade ago. 

In order for a business to remain 

relevant, we have to look at 

technology that is changing the 

landscape of businesses, 

otherwise, we will be caught like 

the company manufacturing 

buggy whips while Ford was 

building automobiles. Advances 

in technology have impacted not 

only business models but also 

professions including 

accountants and lawyers. 

There are two driving forces 

changing the business world and 

professions. One is advances in 

technology and the other is the 

shift in demographics of world 

population. Both are going to 

radically alter the foundations 

of current professions. 

I classify advances in technology 

in two categories: 

1. Disruptive technologies 

– those that will change products 

and services dramatically, 

killing older approaches; 

2. Disintermediating 

technologies – ones that will 

eliminate steps and needs for 

human interaction in the process. 

Disruptive technologies have an 

immediate impact, while the 

disintermediating technologies 

create a platform for change that 

may take some time but will have 

a greater impact. 

Blockchain and Robotic Process 

Automation (RPA) are examples 

of such technologies that are 

already altering business 

processes. For example, effective 

implementation of Blockchain 

eliminates the need for ‘auditing’ 

each transaction for assurance. 

You only require auditing the 

implementation process once 

and then depend on Blockchain 

to preserve the integrity of all 

future transactions. 

In the case of RPA, it automates 

steps and removes human 

content, thus enabling repeatable, 

accurate performance. However, 

implementation of RPA creates 

unique challenges for auditing 

actions as well as determining 

legal implication of non or under 

performance. For the legal 

profession, the question becomes 

who is liable for implementing 

RPA – the designer, the creator 

or the implementer? 

Machine learning and cognitive 

computing (generally referred 

to as “Artificial Intelligence - AI”) 

are creating business profiles 

and processes that have not 

been seen before. Amazon 

recommends products based 

on your profile and previous 

searches using these techniques. 

As this becomes more prevalent, 

it will raise legal questions 

about appropriateness (and 

occasionally privacy) of such 

suggestions and potential liability 

from misuse. 


In addition, the demographics of the world 

population are shifting, and an aging 

population will shrink available workforce 

in industrialised nations. This, coupled with 

a lack of skills development in new 

technologies, will create a dearth of 

qualified workers, requiring businesses 

and professions to depend on automation 

and technology. 

Traditional professions such as 

accounting and legal will have to deal with 

both of these issues and will have to 

become nimbler and more risk taking in 

these changing times. 

Computing pioneer, Dr. Grace Hopper 

said the most dangerous phrase in the 

language is, “we have always done it this 

way”. It is clear that stagnant business 

practices will lead to demise; instead, 

we should be saying, “We used to do it 

that way; now we do it better”. 

Author: Jagdish Dalal is a world-renowned 

authority and coveted speaker on management 

strategies, technology, and outsourcing. JDalal 

Associates LLC specialises in consulting in the 

field of IT, change strategies and business 

process outsourcing. Clients range from Fortune 

100 companies to small start-up companies 

from around the globe. Jag was elected to the 

Outsourcing Management Hall of Fame in 2015. 

To find out more visit: www.jdalalassociates.com 


9




William Johnson of The Openside Group explains how to avoid burnout 

from the detrimental ‘always-on’ culture found in many professional 

services firms: If the client says “Jump”, don’t just say, “How high?” 

The ‘always-on’ culture still 

dominates the professional 

services sector, despite a 

significant cost to employees 

and the organisations for 

whom they work. There is no 

empirical evidence that the 

‘always-on’ culture is of any 

benefit to either the firm or to 

clients. We believe it’s time for 

those working in professional 

services firms to stop treating 

the ‘client as king’. 

‘Trusted Advisor’ vs. ‘Pair of hands’ 

Professional services advisors can gain control over their work and 

their lives by focusing, prioritising and occasionally pushing back. 

This can only be done if they recognise that they are equal partners 

with their clients – not servants – and start using the requisite 

behaviours to illustrate this equal status: 

‘Trusted Advisor’ 

‘Pair of hands’ 

What they need to hear 

What they want to hear 

Do what’s right 

Do what you’re told 

Agreed time 

Anytime 

In order for the ‘client is king’ 

situation to change, leaders of 

professional services firms have 

to accept that there is a different 

way of working and model the 

new behaviours they want to 

see. A rebalancing of the client 

advisor relationship is required 

so that ‘client first’ does not mean 

‘client is king’. 

Assured 

Challenging 

Responsive 

Manage Expectations 

Keep Promises 

Thoughtful disobedience 

Submissive 

Deferential 

On-demand 

Desperate to please 

Over-commit 

Mindless obedience 


If the client says 

“Jump”, don’t just 

say, “How high?” 

None of the behaviours 

illustrated by a ‘trusted advisor’ 

are detrimental to the client, 

but the behaviours exhibited by 

a ‘pair of hands’ can certainly 

undermine the brand and status 

of the firm. Advisor behaviours 

are of a significantly greater 

benefit, since clients gain far 

more value when they are 

challenged than when their 

professional advisor obediently 

follows instructions. 

Managing expectations 

What clients want above all else 

when working with a professional 

services firm is value, a good 

outcome and to get what was 

agreed at the outset of the 

engagement. 

Leaders have to manage client 

expectations. Interestingly, it is 

often not the client who expects 

the advisor to be available at 

all hours, but the expectation 

set by the Partners and by the 

firm’s ‘always-on’ culture – the 

prevailing belief that you need be 

available to your clients all day, 

every day. 

To rebalance the client/advisor 

relationship will require Partners 

and Managers to set their clients’ 

expectations at the outset of 

the project and to model the 

behaviours they want their team 

members to follow. 

Clients engage consultants and 

advisors because they want them 

to share their knowledge, guide 

their decisions and challenge their 

thinking. What’s more, by pushing 

back when required (thoughtful 

disobedience) instead of 

mindlessly doing what they’re told, 

consultants eliminate unnecessary, 

fruitless work to the benefit of 

both the client and the firm. 

Those firms who adapt their 

culture by rebalancing the client/ 

advisor relationship will have a 

more engaged, productive and 

satisfied workforce and, rather 

than upsetting clients, they will 

produce better work and create 

more value for their clients – 

which is why the client engaged 

the firm in the first place. 

Reverence or regicide? 

You decide. 

Author: William Johnson, Managing Director, Openside has advised firms 

on aligning behaviours with strategy for over 25 years. His interest in learning 

theories and applications began in the Fleet Air Arm of the Royal Navy, where 

after front line service he became involved in aircrew training. He subsequently 

trained as an organisational psychologist and completed an MBA. 

To find out more visit: www.openside.group 


11

Why law firms 


Rob Miller of Miller Titerle + Co argues that structural and regulatory 

changes are needed to get to the root of why law firms fail 

Law firms are failing. They are failing society 

and clients by not providing accessible and 

affordable legal services and by offering the 

wrong services. They are failing their internal 

stakeholders by assuming only senior 

lawyers contribute to law firm success. 

These shortcomings can’t be easily fixed with 

the latest technology or management practice 

trend. Instead, the future success of law firms 

requires a shift from short-term thinking to 

long-term thinking. 

The problem 

We know the problem: better and more 

affordable services are being developed by 

non-traditional providers. As a profession, we 

spend a lot of time wringing our hands about the 

rise of our competitors, the growth of in-house 

capacity, the threat of automation, the success 

of big accounting firms and the rise of artificial 

intelligence. Yet we are not responding because, 

as many legal futurists have pointed out, to do 

so requires long-term thinking — but law firms 

are driven to pursue short-term rewards. 

The roots of law firm short-termism are clear. 

Very few retiring lawyers are “bought out” in 

a meaningful way; they simply withdraw their 

capital. Because they have little financial stake 

in the future of the firm, they are motivated to 

pull as much money as possible out of the firm 

while they are practising. These senior partners 

often control the firm, leaving the people with 

the least interest in long-term results 

responsible for major decisions. The outcome 

is a misalignment between what motivates 

decision-makers (short-term profit-taking) and 

what is best for the enterprise (long-term 

strategic investment). 


Law firms must 

restructure as 

sustainable longterm 

businesses 

that can attract 

and retain the 

right kind of talent 

for the emerging 

legal market 

Law firms are failing society. 

We are mandated by the self-regulatory social 

contract and our canon of professional ethics to 

promote accessibility and affordability of legal 

services. Technology and process improvement 

are the most direct paths to delivering these, yet 

firms are neither investing in nor hiring the right 

people to do them. 

Law firms are failing clients. 

In general, we have not embraced better 

business processes and technology, trained the 

“technology-enabled lawyer” that the future 

The solutions 

demands, embraced fee structures 

that better align our interests with 

those of our clients, or adopted lean 

processes and project management. 

Law firms are failing their people. 

When firms make decisions driven 

by short-term thinking, culture suffers 

and retention rates drop. The dark 

psychology of the billable hour and 

current-year profit-per-partner has 

a significant impact on firm-wide 

happiness. 

All of this points to a clear path. Law firms must 

restructure as sustainable long-term businesses 

that can attract and retain the right kind of talent 

for the emerging legal market. To do this requires 

two things: changing our corporate business 

model to promote long-term thinking and 

changing our regulation to allow us to compete 

for and motivate the right kind of talent. 

In terms of the corporate business model, law 

firms need to move from the “capital-in, capitalout” 

model that favours short-term thinking 

toward an equity-based model that encourages 

long-term growth of the business. We must open 

our equity doors earlier so that the generation 

that best understands technology and user 

experience is encouraged to come, to contribute 

and to stay. 

It is not easy; it asks the most powerful partners 

to question deeply-held assumptions about 

contribution, to question their own entitlements 

and to cede control. It asks all lawyers to build 

a collective instead of individual books and to 

sacrifice short-term rewards for long-term 

incentives. 

While fixing law firm capital structures is entirely 

within a firm’s control, extending ownership to 

non-legal talent is not. The list of potential key 

players is long: business and HR executives, 

technology professionals, project managers, 

accountants, business process specialists to 

name a few. Our competitors are winning the 

battle for this talent because they can attract, 

retain and align key talent around a common 

goal through ownership in the enterprise. 

Unfortunately, law firms do not currently have 

this option as we are prevented by regulation 

from opening our capital structures to attract 

and retain this talent. 

To help law firms compete, we need to open our 

ownership rules to allow for non-lawyer employeeownership. 

I am not talking about jumping with 

both feet into a wave of law firm IPOs, but instead 

looking to existing, tested and trusted rules. For 

example, the British Columbia Legal Profession Act 

permits law-firm ownership by relatives of lawyers 

and may soon permit law firm ownership by 

licensed paralegals. Extending these rules to 

include employees of a law firm while they are 

employed by the firm would be a safe and 

incremental change, yet one that sets up our 

profession to succeed in the modern legal market 

This type of important policy change requires us 

to come together as a profession and encourage 

our law societies to support regulatory 

amendments that allow non-lawyer employee 

ownership. If we are not able to fiercely compete 

for the right talent - including offering them 

ownership of our enterprises and treating them 

like equals - we will continue to give our 

competitors that running head start. For me, 

this regulatory reform is the most essential 

innovation, and the biggest opportunity, facing 

our profession. 

Author: Rob Miller is the CEO and co-founder of Miller Titerle + Co, an employee-owned Canadian law firm and 

MSI’s exclusive Vancouver law firm member. The above article is an edited version of a piece first published in 

Canadian Lawyer. To find out more visit: www.millertiterle.com 


13

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MSI Pulse: Insights from the legal and accountancy professions (Edition 1)

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