Copyright Fast Company
For years, service firms grew the same way: Hire more people, take on more work, repeat. More staff once meant more billable hours and more revenue. That equation no longer works. AI has shifted the balance, making growth less about headcount and more about how a firm operates. You can already see it across service industries. In law, AI is taking on document review so attorneys can spend more time advising clients. Marketing teams are analyzing campaign results in real time instead of waiting weeks for reports. Architecture firms are experimenting with AI to speed up design studies and compliance checks. The work gets done, but now people have more room for strategy, creativity, and client relationships. AI is reshaping the business model. THE NEW EQUATION FOR PROFITABILITY With how AI handles repetitive work, the old approach to throw more hours at the problem is no longer the solution. AI allows more time for strategy, judgment, and client conversations, translating to faster delivery, stronger margins, and growth opportunity. Subscribe to the Daily newsletter.Fast Company's trending stories delivered to you every day Privacy Policy | Fast Company Newsletters Recent data shows the shift is real. A recent IBM study found that organizations are already seeing improvements in operating profit tied to AI adoption. On average, firms reported 7% returns, while the top performers were closer to 18%. A McKinsey survey found that more than three quarters of companies now use AI in at least one part of their business. The common thread is clear: The firms that redesign workflows and measure outcomes carefully are the ones seeing real gains. With AI taking on the routine work, growth can come from delivering more value to each client, entering new markets, or even turning internal capabilities into new service lines. The model is no longer about how many hours can be sold, but about how much insight, creativity, and impact a team can bring. When companies tack AI onto old processes instead of treating it as a real shift, they fail. In fact, about 95% of generative AI pilots fail to deliver measurable profit impact. Those that succeed do more than test. They rethink workflows, invest in the right infrastructure, build teams that combine domain and AI expertise, and initiate structure from the start. Making the new profitability equation work takes new skills, new systems, and a fresh way of thinking about value. WHY AI IS RESHAPING SERVICE WORK This is where the transformation becomes visible in day-to-day practice. AI is not only about efficiency. It changes the nature of the work itself. Valuable time goes into gathering data, reviewing documents, or drafting first versions. When AI takes on the data load, people are free to focus on judgment, creativity, and personal connection. That shift is what makes AI more than a productivity tool. It is a catalyst for raising the standard of service. In law, contract reviews that once stretched over weeks can now be completed in days, with AI flagging key clauses for attorneys to evaluate, allowing lawyers to spend more time on strategy and client counsel instead of combing through thousands of pages. In marketing, teams use AI to simplify work that once needed a specialist. AI evaluates campaigns in real time instead of waiting weeks for reports, even identifying which messages or visuals are connecting with audiences to suggest adjustments. In architecture, AI is reshaping the early phases of work. Firms run dozens of design studies in parallel, test energy performance, and handle compliance checks that once took weeks of coordination. That speed gives architects more room to refine ideas with clients and focus on the creative side of design. Across industries, AI assists professionals so that focus lies where in the most critical areas; it is not replacing expertise but sharpening it, giving clients a better result than human effort alone. THE RISK OF FALLING BEHIND There are two buckets of approaches to AI: Firms moving quickly with AI and firms dragging their feet. advertisement When it comes to AI, hesitation carries real risk. Clients are not waiting. They expect faster delivery, sharper insights, and more data-driven answers because they are already investing in AI themselves. A provider that cannot meet those expectations risks losing business to competitors that can. About three quarters of companies remain stuck in pilot projects, with only a few moving on to real value. Meanwhile, firms with clear strategies are twice as likely to see revenue growth from AI compared to those that dabble without direction. The S&P Global study added another layer, finding that more than 40% of companies abandoned most of their AI initiatives this year, up sharply from just 17% the year before. The message is clear: AI rewards commitment. Firms that move past experimentation and build AI into their core operations are pulling ahead, while those that hesitate are losing ground. EMBRACE THE FUTURE OF SERVICES AI is no longer a side project. It is becoming part of the foundation for how service work gets done. Firms that lean in are changing how they operate, making teams more effective, and gaining an edge in crowded markets. Those investments will not just cut costs in the short term; they reshape how entire industries grow in the years ahead. What was once considered impossible for service businesses is now within reach. Firms that once struggled to scale beyond their headcount are starting to grow more like technology companies. Internal AI capabilities are turning into new service lines. The firms that are early adapting firms are not just surviving this transition, they are reshaping success. The shift is already underway. For the firms willing to act, AI offers a chance to raise the standard of service and compete on new terms. For those that wait, the window is closing fast. In business, survival goes to those who adapt. This time will be no different. Sandeep Ahuja is CEO of cove.
