Abstract
Professional service firms (PSFs) are increasingly integrating artificial intelligence (AI) to enhance productivity and service delivery. However, AI adoption presents both opportunities and challenges, particularly for neo-PSFs (e.g. management consultancies), which operate with fluid boundaries and diverse competencies. This study investigates the challenges and limitations of AI implementation in neo-PSFs through a two-part qualitative approach: a systematic literature review and semi-structured expert interviews. The research highlights key operational, ethical, and structural constraints, such as professional autonomy erosion, data security concerns, and task redefinition. By comparing AI adoption in neo-PSFs with classic PSFs, the study identifies distinct challenges and proposes strategies for balancing technological innovation with professional identity. Findings contribute to ongoing discourse on AI's disruptive impact and offer practical insights for organizations navigating AI-driven transformations. The study provides strategic recommendations for mitigating risks and optimizing AI integration in knowledge-intensive firms, addressing critical research gaps in PSF digitalisation.