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Navigating the Legal Landscape: Best Practices for Implementing AI

By Anthony Johnson |

The following article was contributed by Anthony Johnson, CEO of the Johnson Firm and Stellium.

The ascent of AI in law firms has thrust the intricate web of complexities and legal issues surrounding their implementation into the spotlight. As law firms grapple with the delicate balance between innovation and ethical considerations, they are tasked with navigating the minefield of AI ethics, AI bias, and synthetic data. Nevertheless, within these formidable challenges, law firms are presented with a singular and unparalleled opportunity to shape the landscape of AI law, copyright ownership decisively, and AI human rights.

Conducting Due Diligence on AI Technologies

Law firms embarking on the integration of AI into their practices must commence with conducting comprehensive due diligence. This process entails a precise evaluation of the AI technology’s origins, development process, and the integrity of the data utilized for training. Safeguarding that the AI systems adopted must be meticulously developed with legally sourced and unbiased data sets. This measure is the linchpin in averting potential ethical or legal repercussions. It is especially paramount to be acutely mindful of the perils posed by AI bias and AI hallucination, both of which have the potential to undermine the fairness and credibility of legal outcomes.

Guidelines must decisively address the responsible use of AI, encompassing critical issues related to AI ethics, AI law, and copyright ownership. Furthermore, defining the scope of AI’s decision-making power within legal cases is essential to avert any over-reliance on automated processes. By setting these boundaries, law firms demonstrate compliance with existing legal standards and actively shape the development of new norms in the rapidly evolving realm of legal AI.

Training and Awareness Programs for Lawyers

Implementing AI tech in law firms isn’t just a technical challenge; it’s also a cultural shift. Regular training and awareness programs must be conducted to ensure responsible and effective use. These programs should focus on legal tech training, providing lawyers and legal staff with a deep understanding of AI capabilities and limitations. Addressing ethical AI use and the implications of AI on human rights in daily legal tasks is also required. Empowering legal teams with knowledge and tools will enhance their technological competence and drive positive change.

Risks and Ethical Considerations of Using AI in Legal Practices

Confidentiality and Data Privacy Concerns

The integration of AI within legal practices presents substantial risks concerning confidentiality and data privacy. Law firms entrusted with handling sensitive information must confront the stark reality that the deployment of AI technologies directly threatens client confidentiality if mishandled. AI systems’ insatiable appetite for large datasets during training lays bare the potential for exposing personal client data to unauthorized access or breaches. Without question, unwaveringly robust data protection measures must be enacted to safeguard trust and uphold the legal standards of confidentiality.

Intellectual Property and Copyright Issues

The pivotal role of AI in content generation has ignited intricate debates surrounding intellectual property rights and copyright ownership. As AI systems craft documents and materials, determining rightful ownership—be it the AI, the developer, or the law firm—emerges as a fiercely contested matter. This not only presents legal hurdles but also engenders profound ethical deliberations concerning the attribution and commercialization of AI-generated content within the legal domain.

Bias and Discrimination in AI Outputs

The critical risk looms large: the potential for AI to perpetuate or even exacerbate biases. AI systems, mere reflections of the data they are trained on, stand as monuments to the skewed training materials that breed discriminatory outcomes. This concern is especially poignant in legal practices, where the mandate for fair and impartial decisions reigns supreme. Addressing AI bias is not just important; it is imperative to prevent the unjust treatment of individuals based on flawed or biased AI assessments, thereby upholding the irrefutable principles of justice and equality in legal proceedings.

Worst Case Scenarios: The Legal Risks and Pitfalls of Misusing AI

Violations of Client Confidentiality

The most egregious risk lies in the potential violation of client confidentiality. Law firms that dare to integrate AI tools must guarantee that these systems are absolutely impervious to breaches that could compromise sensitive information. Without the most stringent security measures, AI dares to inadvertently leak client data, resulting in severe legal repercussions and the irrevocable loss of client trust. This scenario emphatically underscores the necessity for robust data protection protocols in all AI deployments.

Intellectual Property Issues

The misuse of AI inevitably leads to intricate intellectual property disputes. As AI systems possess the capability to generate legal documents and other intellectual outputs, the question of copyright ownership—whether it pertains to the AI, the law firm, or the original data providers—becomes a source of contention. Mismanagement in this domain can precipitate costly litigation, thrusting law firms into the task of navigating a labyrinth of AI law and copyright ownership issues. It is important that firms assertively delineate ownership rights in their AI deployment strategies to circumvent these potential pitfalls preemptively.

Ethical Breaches and Professional Misconduct

The reckless application of AI in legal practices invites ethical breaches and professional misconduct. Unmonitored AI systems presume to make decisions, potentially flouting the ethical standards decreed by legal authorities. The specter of AI bias looms large, capable of distorting decision-making in an unjust and discriminatory manner. Law firms must enforce stringent guidelines and conduct routine audits of their AI tools to uphold ethical compliance, thereby averting any semblance of professional misconduct that could mar their esteemed reputation and credibility.

Case Studies: Success and Cautionary Tales in AI Implementation

Successful AI Integrations in Law Firms

The legal industry has witnessed numerous triumphant AI integrations that have set the gold standard for technology adoption, unequivocally elevating efficiency and accuracy. Take, for example, a prominent U.S. law firm that fearlessly harnessed AI to automate document analysis for litigation cases, substantially reducing lawyers’ document review time while magnifying the precision of findings. Not only did this optimization revolutionize the workflow, but it also empowered attorneys to concentrate on more strategic tasks, thereby enhancing client service and firm profitability. In another case, an international law firm adopted AI-driven predictive analytics to forecast litigation outcomes. This tool provided unprecedented precision in advising clients on the feasibility of pursuing or settling cases, strengthening client trust and firm reputation. These examples highlight the transformative potential of AI when integrated into legal frameworks.

Conclusion

Integrating AI within the legal sector is an urgent reality that law firms cannot ignore. While the ascent of AI presents complex challenges, it also offers an unparalleled opportunity to shape AI law, copyright ownership, and AI human rights. To successfully implement AI in legal practices, due diligence on AI technologies, training programs for lawyers, and establishing clear guidelines and ethical standards are crucial. However, risks and moral considerations must be carefully addressed, such as confidentiality and data privacy concerns, intellectual property and copyright issues, and bias and discrimination in AI outputs. Failure to do so can lead to violations of client confidentiality and costly intellectual property disputes. By navigating these risks and pitfalls, law firms can harness the transformative power of AI while upholding legal standards and ensuring a fair and just legal system.

About the author

Anthony Johnson

Anthony Johnson

Commercial

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Case Developments Commercial

CAT Rules in Favour of BT in Harbour-Funded Claim Valued at £1.3bn

By Harry Moran |

As LFJ reported yesterday, funders and law firms alike are looking to the Competition Appeal Tribunal (CAT) as one of the most influential factors for the future of the UK litigation market in 2025 and beyond. A judgment released by the CAT yesterday that found in favour of Britain’s largest telecommunications business may provide a warning to industry leaders of the uncertainty around funding these high value collective proceedings.

An article in The Global Legal Post provides an overview of the judgment handed down by the CAT in Justin Le Patourel v BT Group PLC, as the Tribunal dismissed the claim against the telecoms company following the trial in March of this year. The opt-out claim valued at around £1.3 billion, was first brought before the Tribunal in 2021 and sought compensation for BT customers who had allegedly been overcharged for landline services from October 2015.

In the executive summary of the judgment, the CAT found “that just because a price is excessive does not mean that it was also unfair”, with the Tribunal concluding that “there was no abuse of dominant position” by BT.

The proceedings which were led by class representative Justin Le Patourel, founder of Collective Action on Land Lines (CALL), were financed with Harbour Litigation Funding. When the application for a Collective Proceedings Order (CPO) was granted in 2021, Harbour highlighted the claim as having originally been worth up to £600 million with the potential for customers to receive up to £500 if the case had been successful.

In a statement, Le Patourel said that he was “disappointed that it [the CAT] did not agree that these prices were unfair”, but said that they would now consider “whether the next step will be an appeal to the Court of Appeal to challenge this verdict”. The claimants have been represented by Mishcon de Reya in the case.

Commenting on the impact of the judgment, Tim West, disputes partner at Ashurst, said that it could have a “dampening effect, at least in the short term, on the availability of capital to fund the more novel or unusual claims in the CAT moving forward”. Similarly, Mohsin Patel, director and co-founder of Factor Risk Management, described the outcome as “a bitter pill to swallow” for both the claimants and for the law firm and funder who backed the case.

The CAT’s full judgment and executive summary can be accessed on the Tribunal’s website.

Commercial Fundraising

Sandfield Capital Secures £600m Facility to Expand Funding Operations

By Harry Moran |

Sandfield Capital, a Liverpool-based litigation funder, has reached an agreement for a £600 million facility with Perspective Investments. The investment, which is conditional on the identification of suitable claims that can be funded, has been secured to allow Sandfield Capital to strategically expand its operations and the number of claims it can fund. 

An article in Insider Media covers the the fourth capital raise in the last 12 months for Sandfield Capital, with LFJ having previously covered the most recent £10.5 million funding facility that was secured last month. Since its founding in 2020, Sandfield Capital has already expanded from its original office in Liverpool with a footprint established in London as well. 

Steven D'Ambrosio, chief executive of Sandfield Capital, celebrated the announced by saying:  “This new facility presents significant opportunities for Sandfield and is testament to our business model. Key to our strategy to deploy the facility is expanding our legal panel. There's no shortage of quality law firms specialising in this area and we are keen to develop further strong and symbiotic relationships. Perspective Investments see considerable opportunities and bring a wealth of experience in institutional investment with a strong track record.”

Arno Kitts, founder and chief investment officer of Perspective Investments, also provided the following statement:  “Sandfield Capital's business model includes a bespoke lending platform with the ability to integrate seamlessly with law firms' systems to ensure compliance with regulatory and underwriting standards.  This technology enables claims to be processed rapidly whilst all loans are fully insured so that if a claim is unsuccessful, the individual claimant has nothing to pay. This is an excellent investment proposition for Perspective Investments and we are looking forward to working with the management team who have a track record of continuously evolving the business to meet growing client needs.”

Announcements Case Developments Commercial

Australian Google Ad Tech Class Action Commenced on Behalf of Publishers

By Harry Moran |

A class action was filed on 16 December 2024 on behalf of QNews Pty Ltd and Sydney Times Media Pty Ltd against Google LLC, Google Pte Ltd and Google Australia Pty Ltd (Google). 

The class action has been commenced to recover compensation for Australian-domiciled website and app publishers who have suffered financial losses as a result of Google’s misuse of market power in the advertising technology sector. The alleged loss is that publishers would have had significantly higher revenues from selling advertising space, and would have kept greater profits, if not for Google’s misuse of market power. 

The class action is being prosecuted by Piper Alderman with funding from Woodsford, which means affected publishers will not pay costs to participate in this class action, nor will they have any financial risk in relation to Google’s costs. 

Anyone, or any business, who has owned a website or app and sold advertising space using Google’s ad tech tools can join the action as a group member by registering their details at www.googleadtechaction.com.au. Participation in the action as a group member will be confidential so Google will not become aware of the identity of group members. 

The class action is on behalf of all publishers who had websites or apps and sold advertising space using Google’s platforms targeted at Australian consumers, including: 

  1. Google Ad Manager (GAM);
  2. Doubleclick for Publishers (DFP);
  3. Google Ad Exchange (AdX); and
  4. Google AdSense or AdMob. 

for the period 16 December 2018 to 16 December 2024. 

Google’s conduct 

Google’s conduct in the ad tech market is under scrutiny in various jurisdictions around the world. In June 2021, the French competition authority concluded that Google had abused its dominant position in the ad tech market. Google did not contest the decision, accepted a fine of €220m and agreed to change its conduct. The UK Competition and Markets Authority, the European Commission, the US Department of Justice and the Canadian Competition Bureau have also commenced investigations into, or legal proceedings regarding, Google’s conduct in ad tech. There are also class actions being prosecuted against Google for its practices in the ad tech market in the UK, EU and Canada. 

In Australia, Google’s substantial market power and conduct has been the subject of regulatory investigation and scrutiny by the Australian Competition and Consumer Commission (ACCC) which released its report in August 2021. The ACCC found that “Google is the largest supplier of ad tech services across the entire ad tech supply chain: no other provider has the scale or reach across the ad tech supply chain that Google does.” It concluded that “Google’s vertical integration and dominance across the ad tech supply chain, and in related services, have allowed it to engage in leveraging and self-preferencing conduct, which has likely interfered with the competitive process". 

Quotes 

Greg Whyte, a partner at Piper Alderman, said: 

“This class action is of major importance to publishers, who have suffered as a result of Google’s practices in the ad tech monopoly that it has secured. As is the case in several other 2. jurisdictions around the world, Google will be required to respond to and defend its monopolistic practices which significantly affect competition in the Australian publishing market”. 

Charlie Morris, Chief Investment Officer at Woodsford said: “This class action follows numerous other class actions against Google in other jurisdictions regarding its infringement of competition laws in relation to AdTech. This action aims to hold Google to account for its misuse of market power and compensate website and app publishers for the consequences of Google’s misconduct. Working closely with economists, we have determined that Australian website and app publishers have been earning significantly less revenue and profits from advertising than they should have. We aim to right this wrong.” 

Class Action representation 

The team prosecuting the ad tech class action comprises: 

  • Law firm: Piper Alderman
  • Funder: Woodsford
  • Counsel team: Nicholas de Young KC, Simon Snow and Nicholas Walter