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Legal and reputational risks of breaching new AI ban
With the partial ban on using AI in court proceedings being enforced, a law firm CEO has outlined the potential legal and reputational risks that NSW-based lawyers or law firms could face if they disregard this practice note.
Grace Robbie
At the start of the month, Practice Note SC Gen 23 was enacted, establishing rigorous restrictions governing the use of generative AI (GenAI) in legal proceedings for practitioners in Australia’s most populous state, NSW, as this innovative and rapidly evolving technology increasingly permeates the legal profession.
In light of the implementation of this partial ban, Dannielle Ford, the co-owner and CEO of Cheney Suthers Lawyers, has discussed the considerable legal and reputable risks that legal professionals and law firms must acknowledge should they violate this practice note.
Legal risks
Ford advised law firms and practitioners to exercise caution when considering the adoption of AI-driven tools in their daily practice due to significant legal risks associated with violating established conduct rules and requirements.
The Legal Profession Uniform Law Australian Solicitor’s Conduct Rules 2015 (Conduct Rules) delineate the professional standards that lawyers in NSW are obligated to uphold.
One key aspect of these Conduct Rules is that lawyers must deliver competent legal services, with Ford explaining that this “duty is not discharged when adopting new technology,” including AI.
She cited a recent case in the general federal law division of the Federal Circuit and Family Court of Australia, highlighting the importance of complying with the Conduct Rules.
In this instance, Ford explained that the “lawyer used ChatGPT to generate an outline of submissions but made the grave error of failing to verify the AI-produced citation”.
Presiding Judge Rania Skaros remarked that the lawyer’s conduct “falls short of the competence and diligence” expected from a legal representative. The judge further asserted that such behaviour undermines the duty lawyers owe to the court to “not deceive or mislead” and constitutes a violation of the Conduct Rules.
Ford pointed out that lawyers who neglect to comply with either the Conduct Rules or the practice note requirements may face “allegations of professional misconduct or unsatisfactory professional conduct”. She emphasised that both of these allegations are among the two “most serious allegations a solicitor can face”.
Reputational risks
Beyond the legal consequences, non-compliance with GenAI guidelines carries significant reputational risks, both within the legal community and among clients.
Ford argued that legal practitioners who choose to employ AI in a manner that contravenes established guidelines may be perceived by their colleagues as “failing to uphold ethical and professional standards”.
She elaborated on how such a perception may lead to “damaging relationships” with peers and “eroding [their] trust”.
Moreover, Ford expressed that a lawyer found to have misused AI may jeopardise their position on professional committees, as well as their standing as a mentor to emerging legal professionals.
Given the considerable trust clients place in their legal representatives, Ford highlighted that should clients become aware of any misuse of AI by their lawyer, they are “likely to lose confidence in their representative’s competence and integrity”.
She highlighted that this erosion of trust could result in negative word of mouth from clients, which is “likely to damage the firm’s broader community reputation”.
Best practice
Despite the evident risks associated with non-compliance with the new practice note requirements, numerous legal professionals and firms continue to encounter challenges in adhering to these standards.
Ford highlighted that there are several factors that contribute to this issue, including “practical pressure, lack of awareness, or poor judgement”.
Furthermore, she noted that many lawyers, earlier in their careers, often “feel unprepared to execute a task” assigned to them, causing them to depend on AI tools to compensate for their perceived lack of experience.
To mitigate the risks associated with GenAI, Ford calls for law firms to offer guidance and education regarding the appropriate use of technology within the profession, noting that they are “responsible for ensuring compliance with the requirements”.
Additionally, Ford explained that law firms must implement “clear internal protocols” and practices regarding the appropriate use of AI to guarantee compliance.
