Potential Issues and Liabilities of Using Generative AI for Legal Document Drafting 

Madison Shaner

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In recent years, the legal industry has witnessed a significant transformation, with the integration of technology and artificial intelligence (AI) into various aspects of legal practice, and while it’s unlikely that AI will kill all the lawyers,  one notable advancement is the use of large language models of generative AI to draft legal documents, even by non-lawyers. While this technology offers several advantages, such as increased efficiency and reduced costs, it also brings forth a host of potential issues and liabilities that both legal professionals and non-lawyers must carefully consider. In this article, we’ll explore these concerns and provide insights into mitigating associated risks.

1. Accuracy and Quality Control

One of the primary concerns when using AI for legal document drafting is the accuracy of the generated content. AI models, while highly advanced, are not infallible and can produce errors, omissions, or inaccuracies in legal documents. These errors include hallucinations. For both lawyers and non-lawyers, who may not possess the legal expertise to recognize these issues, the risk of creating problematic documents is even higher. But even lawyers who aren’t careful have been caught, and sanctioned for these errors 

It is critical that anyone using AI implement rigorous quality control processes that involves careful proofreading and legal analysis of AI-generated documents. 

2. Lack of Legal Judgment and Context

Generative AI models lack the ability to provide legal judgment and context, which are crucial in drafting  legal documents. Non-lawyers using AI may not fully understand the nuances of specific cases, jurisdictions, or evolving legal precedents, potentially leading to suboptimal or inappropriate content in documents. Beyond a lack of legal judgment and context, generative AI models are also only as good as the prompts a user inputs, and both lawyers and non-lawyers alike, may lack the experience to appropriately input the information into the AI model to generate a product worth using. And while lawyers may have the appropriate expertise to edit and appropriately contextualize AI-outputs, many companies are hiring AI prompt engineers and paying them well into six-figures annually to appropriately engineer their AI-inputs.  

When used, AI-generated drafts should be used as a starting point rather than a final product. Leverage the expertise of legal professionals to review, customize, and contextualize the documents to meet the unique needs of the client and the case. Lawyers and law firms considering the use of generative AI for the drafting of legal documents should consider finding trainings on prompt engineering in order to effectively build prompts. 

3. Ethical Considerations

The use of AI for legal document drafting raises ethical questions. The most significant of these concerns involves confidentiality and data security. AI models require access to a vast amount of data to train effectively. Parties using AI for document drafting may inadvertently expose sensitive information to breaches or unauthorized access, potentially violating data privacy and confidentiality rules. 

When utilizing AI for legal document drafting, it’s essential to establish clear ethical guidelines and boundaries. Drafters must exercise extreme caution when handling sensitive information, and lawyers in particular must be especially sensitive  about including client information in any AI-context. It is crucial tp implement strong encryption, access controls, and data retention policies to safeguard client confidentiality and comply with relevant data privacy regulations.

4. Regulatory Compliance

Different jurisdictions may have specific regulations and requirements for legal documents. Non-lawyers using AI may not be aware of or fully understand the legal requirements of a particular jurisdiction, which can lead to non-compliance and potential legal repercussions. 

Non-lawyers should seek guidance on local legal requirements to ensure that AI-generated documents comply with the laws and regulations of the relevant jurisdiction. Collaboration with legal professionals is advisable, Milgrom & Daskam’s newly formed AI Committee is a fantastic resource dedicated to instructing non-lawyers on best practices around AI and the law

5. Reliability and Maintenance 

AI models require ongoing updates and maintenance to remain effective. Non-lawyers using AI may not possess the knowledge or resources to keep the AI model up to date with the latest legal developments and changes in the law, which could result in outdated or inaccurate document templates. 

Users should establish a process for regularly reviewing and updating AI models and templates. Collaboration with legal professionals or AI providers with legal expertise can help maintain reliability. 

In conclusion, while the use of generative AI for legal document drafting offers substantial benefits, the involvement of non-lawyers in this process introduces additional risks and liabilities. Both legal professionals and non-lawyers must exercise diligence, ethical considerations, and quality control measures when integrating AI into their practice. By combining the strengths of AI technology with the expertise of legal professionals, firms can harness the full potential of AI while minimizing associated risks and liabilities, especially when non-lawyers are involved. 

ABOUT THE AUTHOR

SENIOR ASSOCIATE

Madison (Maddie) Shaner joined Milgrom & Daskam as an Associate in 2019. Her practice focuses on corporate and real estate transactions. Prior to joining Milgrom & Daskam, Maddie was an associate at Tyson, Gurney & Hovey, LLC where she conducted oil and gas title examination and assisted in drafting drilling and division order title opinions for upstream oil and gas clients.

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