How can your law firm's risk management programs keep up with the ethical and practical challenges of artificial intelligence? Here is a "quick start" outline.


Step 1: Understanding Artificial Intelligence (AI) and Its Implications

Before implementing any AI tools, it is crucial for law firms, especially small or midsize ones, to gain a comprehensive understanding of what AI can do and the potential risks associated with its use. This includes understanding how AI systems work, the types of legal tasks they can perform, and the areas where they may require human oversight].

Step 2: Developing AI Usage Policies

Law firms should develop clear policies regarding the use of AI. These policies should address:

  • Selection of AI Tools: Criteria for choosing AI solutions that meet ethical and professional standards.
  • Data Handling and Privacy: Ensuring that AI tools comply with data protection laws and client confidentiality requirements.
  • Bias and Fairness: Procedures for testing AI tools for bias and ensuring that their use does not result in unfair or discriminatory outcomes.
    Transparency and Explainability: Ensuring that AI-generated outcomes can be explained and justified in legal terms.

Step 3: Training and Supervision

Lawyers and staff should receive training on the capabilities and limitations of AI tools. This includes understanding how to interpret AI outputs and when to rely on human judgment[5][17]. Supervision protocols should be established to monitor AI tools' performance and compliance with legal and ethical standards.

Step 4: Regular Audits and Updates

Implement regular audits to assess the performance and impact of AI tools. This helps in identifying any issues early and updating the AI systems or policies as necessary to address new risks or changes in legal standards.

Step 5: Client Disclosure and Consent

Clients should be informed about the firm’s use of AI, including the benefits and potential risks. Obtain explicit consent where necessary, especially when AI is used in sensitive matters.

Step 6: Establishing a Response Plan

Develop a response plan for potential AI failures or breaches, including data breaches or situations where AI tools provide incorrect legal advice. This plan should include steps for mitigating damage, notifying affected parties, and rectifying errors.

High-Profile Risks in Using AI in Legal Practices

1. Data Security and Privacy Risks

AI systems often process large volumes of sensitive data. There is a risk of data breaches or unauthorized access, which can compromise client confidentiality and violate data protection laws.

2. Bias and Discrimination

AI systems can perpetuate or even amplify biases present in their training data. This can lead to unfair or discriminatory outcomes, particularly in areas like litigation prediction, risk assessment, and client screening.

3. Dependence and Overreliance

There is a risk that lawyers may become overly dependent on AI tools, potentially leading to a degradation of professional skills and judgment. Overreliance on AI can also lead to errors if the AI system's recommendations are incorrect or not suitable for the specific context. Always keep a human expert in the loop.

4. Ethical and Professional Responsibility

Lawyers are ultimately responsible for the advice they provide and the decisions they make. There is a risk that improper use of AI could lead to violations of ethical and professional standards, particularly if AI-generated advice is wrong or if the lawyer fails to adequately supervise the AI system].

5. Transparency and Explainability Issues

AI systems can sometimes operate as "black boxes," with decision-making processes that are not transparent or understandable. This can create challenges in explaining decisions to clients or justifying them in court, potentially undermining trust and accountability.

A basic part of good law firm management

A systematic, well-structured, and alert risk-management program specifically focused on the use of artificial intelligence is not long "nice to have." We recommend that every law firm, no matter how small, developed documented policies and protocols to govern the use of AI and respond to its risks. There will be a significant cost in terms of the value of partner time and management attention, but these costs will prove to be a very small investment that will gain an enormous return in terms of greater productivity, profitability, and better responsiveness for clients.

Norman Clark