AI finds new footing in California's legal landscape

It's undoubtedly true that artificial intelligence "got off on the wrong foot" in the legal industry - many of us first heard of AI's use in law when we read about attorneys being admonished or sanctioned for filing briefs with AI-hallucinated citations. Despite that ignominious start, as AI continues to permeate the practice of law and our clients' various industries, it is crucial for attorneys to give AI a "second chance" and become versed in this rapidly evolving technology and the issues that arise from its use.

An understanding of generative AI in law broadly falls into three categories. First, the California judicial system is in the process of rolling out rules and protocols for the use of AI that attorneys must be aware of and follow. Second, as AI is increasingly incorporated into legal applications like document review and research platforms, firms should have internal AI policies and discussions with clients about firm use of AI. Third, even if you are disinclined to use AI, your clients may not be, and it is important to understand legal implications of "outside" use of the technology.

Judicial rulemaking

The California court system understands that AI is here to stay and is working towards initial guidelines and policies for the use of AI - including for courts' own use of the technology. In 2024, California Chief Justice Patricia Guerrero launched an Artificial Intelligence Task Force "to evaluate generative AI for its potential benefits to courts and court users while mitigating risks to safeguard the public."

These policies, while still in nascent form, cover items like protection of confidential information and avoidance of AI programs that may not observe notions of confidentiality or privilege (for example, free or low-cost programs that "learn" based on all user input); the need for users and supervisors to review AI-produced material for accuracy and bias; the need for transparent identification of when and how AI is being used in reviewing or generating work product; and how existing Rules of Professional Conduct and state statutes and regulations already apply to use of AI.

Even individual courtrooms are developing AI-focused rules. For example, one judge's standing order in the Central District provides that "any party who uses generative artificial intelligence [...] to generate any portion of a brief, pleading, or other filing must attach to the filing a separate declaration disclosing the use of artificial intelligence and certifying that the filer has reviewed the source material and verified that the artificially generated content is accurate and complies with the filer's Rule 11 obligations."

Increasing incorporation by law firms

Driven by the efficiencies provided by AI in projects like document review, document summarizing, "spit balling" ideas on legal issues, and even initial drafts of documents (as one example, basic contention interrogatories), California law firms are increasingly incorporating AI-based programs into their suite of applications.

To ensure that their entry into generative AI is done as thoughtfully as possible - legally, ethically and in ways that are practical for their business - law firms should consider:

• Carefully reviewing and selecting AI technologies or creating proprietary, customized applications.

• Implementing policies for data collection and other use of AI tools compliant with applicable laws, ethics, and best practices.

• Developing training and educational materials for attorneys and staff.

• Monitoring use of AI tools and services closely and promptly addressing any ethical or other compliance deviations.

Client communication is also critical. Firms should work with their clients to understand their comfort with (or demand for) their outside counsel's use of AI. This might include:

• Initial assessment and goal-setting.

• Discussing what AI tools are available for potential use, highlighting how AI can automate routine tasks to increase both efficiency and accuracy in ways that are specific to that particular client.

• Disclosing potential benefits and risks, as well as safeguards for security and accuracy.

• Collaborating on designing new workflows between the firm and client.

• Developing and testing a pilot program.

Firms and clients should appoint designated contacts or establish committees to collaborate on AI-related matters. Firms should also consider adding AI-related provisions to their written agreements for legal services and how AI will factor into billing models.

Increasing use of AI by clients

Lastly, it should come as no surprise that law firm clients are increasingly using AI in their own businesses, resulting in many potential issues for which their attorneys will be called upon to assist. This may include confidentiality, data, and privacy issues; the need for corporate policies and "handbooks" regarding the use of AI; the accuracy of claims made by AI-generated advertising or AI-assisted customer service; intellectual property issues; and bias and discrimination issues. Attorneys should talk with their clients about clients' use of AI and how to best get ahead of such issues.

Conclusion

While there's typically only one chance to make a first impression, in the legal services industry, AI warrants a thoughtful second look. Attorneys need to stay as up to date as possible on emerging AI tools and related rulemaking, and engage in ongoing conversations with clients to tailor AI use to their clients' needs.

Evan Pitchford is a partner at Thompson Hine LLP, where he focuses on business litigation, intellectual property and trade secrets, independent sales representative and manufacturer/principal issues, regulatory enforcement actions and defenses, transportation concerns, and commercial and residential real estate disputes.