Building a Responsible AI Governance Program for Law Firms: A Step-by-Step Guide

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As artificial intelligence (AI) becomes increasingly prevalent in the legal industry, law firms must navigate the complexities of integrating these technologies while upholding ethical standards and safeguarding client data. Establishing a responsible AI governance program is not only essential for compliance with the Code of Professional Responsibility and legal ethics but also for building trust with clients and minimizing potential risks. This blog post outlines how law firms can build a robust AI governance program, starting from engagement letters and extending to AI committees and vendor management.

1. Begin with Engagement Letters: Setting the Right Expectations

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Engagement letters are the foundation of any client relationship, outlining the scope of representation and the responsibilities of both the firm and the client. As AI becomes a part of legal services, it is crucial to include provisions that address the use of AI tools and technologies. Here’s how to do it:

Transparency About AI Usage:

Clearly communicate in the engagement letter whether and how AI will be used in the delivery of legal services. This could include AI-powered document review, legal research, or case prediction tools.

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Client Consent and Data Usage:

Obtain explicit consent from clients to use their data with AI tools, and be specific if the tools train on the client data or not. Make sure you review all your vendor terms of services and data usage guidelines and keep tabs on them so that you have an understanding which provider trains on your client data or does not. This should also be incorporated into your policy.

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Risk and Liability:

Outline the limitations and potential risks associated with AI tools, such as errors in AI-generated legal research or document review. Clarify that while AI can assist in the legal process, it does not replace professional judgment.

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2. Align with the Code of Professional Responsibility and Legal Ethics

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The integration of AI into legal practice must align with the ethical obligations outlined in the Code of Professional Responsibility. Here are some key considerations:

Competence (Model Rule 1.1): Lawyers must maintain competence in their use of technology, including AI. This means staying informed about the capabilities and limitations of AI tools and understanding how to use them responsibly.

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Confidentiality (Model Rule 1.6): Law firms must ensure that any AI tool used complies with confidentiality obligations. This includes assessing the security and data handling practices of AI vendors.

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Supervision (Model Rule 5.3): Lawyers have a duty to supervise non-lawyer assistants, which extends to AI tools. This means that lawyers must verify the output of AI systems and ensure that they are being used appropriately.

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3. Establish an AI Committee: Driving Responsible AI Use

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Creating an AI committee within the firm is a proactive step towards responsible AI governance. The committee’s role is to oversee the implementation, use, and continuous improvement of AI technologies in alignment with the firm’s ethical obligations and strategic goals.

The committee should include a diverse group of stakeholders, such as partners, associates, IT and security professionals, and even client representatives, to provide varied perspectives on AI governance. Once established, the committee should develop and enforce AI policies, conduct regular reviews of AI tools, and ensure that AI use complies with both internal policies and external regulations. The committee should also place high on their to do list Implementing training programs to educate all members of the firm about the responsible use of AI, the potential risks, and the firm’s AI governance policies.

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Implement AI Policies and Procedures

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Establishing clear AI policies and procedures is critical for ensuring consistent and responsible use of AI across the firm.

AI Usage Policy: Define when and how AI tools can be used in legal practice. Include guidelines on client consent, data handling, and output verification.
Bias and Fairness: Implement procedures to regularly assess AI tools for bias and ensure that they are not disadvantaging any groups or making biased decisions.
Incident Response: Develop a protocol for handling incidents related to AI, such as data breaches or erroneous outputs. This should include steps for internal reporting, client notification, and corrective actions.

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Focus on Vendor Management: Ensuring Compliance and Security

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Many AI tools used by law firms are provided by third-party vendors. It is essential to conduct thorough due diligence and manage these relationships carefully. I won't go into vendor management in too much detail here since I write about it all the time. Please see this blog post.

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Monitor Regulatory Developments and Adapt Accordingly

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The regulatory landscape for AI is evolving rapidly, with frameworks like the NIST AI Risk Management Framework, the EU AI Act, ISO 42001 and a lot of other regulations on the horizon. Law firms must stay informed about these developments and be ready to adapt their AI governance program as needed. At each committee meeting, reviews the firm’s AI policies and procedures to ensure they remain aligned with current best practices and regulatory requirements. Designate someone on the committee to participate in industry groups and discussions on AI governance to stay ahead of emerging trends and challenges. This engagement can also provide valuable insights for refining the firm’s AI governance strategy.

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Conclusion: A Roadmap for Building Responsible AI Governance

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For law firms, building a responsible AI governance program is not just about compliance—it’s about maintaining the trust of clients and the integrity of the legal profession. By incorporating AI considerations into engagement letters, adhering to the Code of Professional Responsibility, establishing AI committees, and managing vendor relationships, law firms can navigate the complexities of AI while upholding their ethical obligations.

Taking a proactive approach to AI governance will not only protect the firm from potential risks but also position it as a leader in the responsible use of technology in legal practice. As AI continues to transform the legal landscape, firms that embrace responsible governance will be better equipped to deliver value to their clients and sustain long-term success.

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