The legal industry is a labyrinth of compliance mandates, and the inclusion of artificial intelligence introduces a host of new considerations. Law firms must tread carefully to leverage AI effectively without skirting the stringent regulations that guide their operations. Begin your journey into the dual concerns of maximising AI efficiency and maintaining legal compliance.
Law firms are duty-bound to uphold a myriad of regulations to ensure the integrity and confidentiality of their work. The rise of AI has augmented these responsibilities, demanding that firms be equally vigilant in their ethical deployment and usage of AI tools. From data privacy concerns under GDPR to the professional rules and non-disclosure requirements, the legal sector is at the forefront of the compliance challenge in an AI-driven world.
The penalties for falling short of compliance standards can be severe, ranging from significant financial liabilities to tarnished reputations, so it’s no wonder 10% of firms we surveyed are not contemplating AI in part due to the risks involved. In an industry where trust is paramount, law firms that do not carefully manage their AI integration risk losing valuable clients and, consequently, their competitive edge.
The AI challenge
Artificial intelligence, although a powerful ally in navigating the vast expanse of legal documentation, is bound to the same regulations as its human counterparts. The opacity of 'black box' AI and the complexity of machine learning algorithms can make it challenging to decipher how, when, and where AI is affecting compliance.
One of the primary sticking points is the lack of transparency within AI systems. Law firms need to ensure that AI decisions can be explained and that they align with the rule-based reasoning that underpins legal compliance. Verifying that AI actions fall within the bounds of ethical considerations and existing statutes is a significant undertaking.
AI is only as good as the data it learns from. When AI systems are fed with poor or non-representative data, integrity and fairness issues can arise. Additionally, the phenomenon known as AI hallucinations, when AI systems generate false or inaccurate information, misled by the biases or gaps in their training data can have dire consequences for firms not fact checking.
Conversely, when data is not kept secure or in open large language models, it opens the door to severe data breaches, depending on the type of data being used. Law firms must ensure that data is secure when using AI tools, and anonymised when it comes to training large language models too.
How to remain compliant
Despite the challenges, the use of managed AI can streamline operations, enhance accuracy, and maintain compliance. By following a set of best practices, law firms can leverage AI to its full potential while minimising legal risks.
The first step towards compliance-savvy AI implementation is choosing a provider that values transparency and data security. Trustworthy AI companies will collaborate with law firms to ensure that the tools complement existing compliance frameworks rather than undermine them. Conducting regular audits of AI models is crucial to ensuring they remain within the boundaries of compliance. This process involves rigorous testing and documentation to verify that AI decisions can be traced back to acceptable legal reasoning and data points.
One such system that offers firms an AI solution is NetDocuments' PatternBuilder MAX. With no-code document assembly and workflow capabilities enabling firms to automate and create, tailored to the needs of specific practice areas and legal tasks – meaning greater accuracy and efficiency for your law firm. It is also built with robust ethical walls and best-in-class security and secure structures where data is purged and not part of the training data the large language model uses – keeping data safe.
Compliance landscapes are dynamic, and AI applications must adapt alongside them. Law firms that employ AI effectively schedule routine assessments to guarantee that their systems are up to date with the prevailing laws and regulations. Artificial intelligence is not a genie that can be released from the bottle without consequence; instead, it's a potent force that requires careful navigation within the bounds of legal compliance.
The managed AI approach is a beacon for law firms seeking to balance innovative technology with steadfast adherence to regulatory frameworks. By taking a proactive stance, familiarising themselves with the regulations that govern their industry, and adopting a collaborative model that combines AI with human oversight, law firms can effectively manage the compliance challenges presented by AI.