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Impact of Artificial Intelligence (AI) on the Legal Industry

In April 2024, the New York State Bar Association (NYSBA) joined Florida and California in creating their own report on the legal, social, and ethical impacts of AI. Artificial Intelligence (AI) has taken the legal industry by storm. Following some initial breakthroughs in the industry, AI has since revealed its shortcomings. After news began to break about ChatGPT (generative AI tool) generating fake cases, the consensus by most lawyers and law firms was to slow down the incorporation of AI. Despite the enormous upside and potential, a more cautious approach was needed. Multiple state bar associations have since concurred.

In 2023, the NYSBA established its own task force, the Task Force on Artificial Intelligence (TFAI), to combat the emerging challenges associated with AI in the legal industry. The TFAI was commissioned to examine the legal, social, and ethical impacts of AI on the legal industry. Furthermore, the TFAI was asked to evaluate AI based software and generative AI technology to see how it could enhance and/or threaten the integrity of the judicial process. After an extensive review of AI’s challenges and impacts, the NYSBA issued an 80-page report. The detailed report, including proposed guidelines and recommendations, may be the most in depth publication (on AI) yet by a state bar association. As expected, the report sparked plenty of debate between members of the legal industry/community.

A substantial portion of the NYSBA report discusses risks associated with AI. As expected, the list of risks is somewhat extensive. Some of the primary risks include issues like security, data privacy, and surveillance. Misinformation is another risky aspect of AI in the legal industry. There have been instances where false or fabricated information is produced, similar to the famous ChatGPT fake case incident that made headlines. Social and ethical issues are also deeply intertwined with the incorporation and use of AI. In the past, AI algorithms have been manipulated to amplify societal biases. AI systems, especially in conjunction with social media, can create an echo chamber that may lead to data producing ideologically based inaccuracies.

The NYSBA report included four major recommendations. First, the TFAI recommends that the NYSBA adopts the AI guidelines outlined in the report. This includes periodically updating the guidelines when it is fit to do so. The TFAI’s second recommendation is to “Focus on Education”.  In the words of the report, the NYSBA should “prioritize education over legislation”. Simply put, there should be an emphasis on the education of judges, lawyers, and law students, so they can better understand the new technology. The third recommendation from the TFAI is to “Identify risks for new regulation”. This means legislatures should work to assess risks or potential risks of AI not addressed by preexisting laws. AI risk assessment is a daunting task for legislatures. The process will likely consist of numerous hearings and expert studies. The report’s final recommendation is to “examine the function of the law in AI governance”. The function of the law can be utilized as a governance tool for rapidly developing AI technology.

The use of AI technology in the legal industry is inevitable. It is important to note, the NYSBA’s report does not condemn the use of AI in law. Instead, the report offers guidelines, recommendations, and risks to be aware of. Ultimately, it is each lawyer’s ethical obligation to use AI in a safe and responsible manner. The NYSBA report states that lawyers must remain compliant with the Rules of Professional Conduct anytime technology is used in legal practice. This rule applies to all technologies, including AI.  As the saying goes, “with great power comes great responsibility”. AI is certainly a powerful tool, and the report makes it clear, utilizing it comes with significant responsibility.