Regulation of the Use of Artificial Intelligence in Law Firms

The use of Artificial Intelligence, more commonly known as AI, has experienced a global boom in the last five (5) years due to its accessibility, automated responses and extensive intellect on any topic. AI is incorporated into the majority of mobile and desktop applications; therefore, it has an indirect influence on all technological aspects of our daily lives.

There aren’t many laws that explicitly provide for the use of AI. However, the Personal Data Protection Act No. 11 of 2022 (the PDP Act) sheds some light on some aspects of this subject.

In this month’s legal update, we explore the ownership of data gathered by AI and the regulation of AI in law firms.

Key Interpretations

The following key terms have been defined in the PDP Act which are applicable to this legal update:

• “Data Controller” means a natural person, legal person or public body which alone or jointly with others determines the purpose and means of processing of personal data; and where the purpose and means of processing are determined by law, “data controller” is the natural person, legal person or public body designated as such by that law, and it includes his representative.
• “Data Processor” means a natural person, legal person or public body which processes personal data for and on behalf of the controller and under the data controller’s instruction, except for the persons who, under the direct authority of the controller, are authorised to process the data and it includes his representative.
• “Personal data” means data about an identifiable person that is recorded in any form, including:
  • personal data relating to the race, national or ethnic origin, religion, age or marital status of the individual;
  • personal data relating to the education, the medical, criminal, or employment history;
  • any identifying number, symbol or other particular assigned to the individual;
  • the address, fingerprints or blood type of the individual;
  • the name of the individual appearing on personal data of another person relating to the individual or where the disclosure of the name itself would reveal personal data about the individual; and
  • correspondence sent to a data controller by the data subject that is explicitly or implicitly of a private or confidential nature and replies to such correspondence that would reveal the contents of the original correspondence, and the views or opinions of any other person about the data subject.
• “Processing” means analysis of personal data, whether or not by automated means, such as obtaining, recording the data or carrying out any analysis on personal data, including:
  • organisation, adaptation or alteration of the personal data;
  • retrieval or use of the data; or
  • alignment, combination, blocking, erasure or destruction of the data.

General Overview

AI can be defined as the development and application of computer systems capable of performing tasks that typically require human intelligence. These tasks include natural language processing, legal research, contract analysis, and decision-making.

The use of AI in law firms offers significant advantages; however, challenges emerge as legal tasks become more complex. AI lacks human interpretation and primarily relies on web resources, data from other networks, and, in some cases, human input. These are sources that may not always be accurate or reliable.

Use of AI comes with the following advantages:

(a) Increases productivity and efficiency in research and administrative tasks

AI significantly enhances productivity by automating time-consuming legal research and administrative processes. Law firms can use AI-powered tools to promptly analyse case law, statutes, and precedents, reducing the time spent on manual research. Furthermore, AI can streamline document review, contract analysis, and case management, allowing law firms to focus on more complex and strategic tasks.

(b) Minimises the demand for human labour, therefore, reducing operational costs

AI reduces the need for excessive human labour by automating routine tasks such as document drafting, legal research, and contract review. This leads to cost savings for law firms since they are now able to operate more efficiently with less resources. As a result, this makes legal services more affordable and accessible to a broader range of clients.

(c) Increases client engagement through personalised services

AI enables law firms to offer personalized services by analysing client data and tailoring legal solutions to individual needs.

(d) Strengthens the competitive advantage of law firms

Law firms that integrate AI into their practice can handle cases more efficiently, process large volumes of legal data faster, and deliver more precise legal insights. This improves client satisfaction and enhances a law firm's competitive standing. AI-driven case prediction tools can help lawyers strategize better, while automation ensures faster turnaround times, giving firms a distinct advantage in the legal market.

However, the use of AI also comes with the following disadvantages:

(a) Decreases human judgement

While AI can analyse patterns and suggest legal solutions, it lacks intuition and does not possess the ability to interpret nuances, or moral considerations that often play a crucial role in legal decision making. Over reliance on AI may result in rigid, formulaic legal analysis that fails to account for unique circumstances in complex cases.

(b) Data protection and security concerns

AI systems process vast amounts of sensitive legal and personal data, making them potential targets for cyberattacks and data breaches. Law firms must ensure that AI-powered platforms comply with data protection laws and implement robust cybersecurity measures to safeguard confidential client information. Additionally, the use of third-party AI tools raises concerns about data privacy, as firms may have limited control over how information is stored and processed.

(c) Reduction in the demand for human capital, leading to loss of employment

As AI automates many routine legal tasks, such as document review and legal research, there is a reduced need for paralegals, junior associates, and legal support staff. This shift could lead to job losses and restructuring within law firms, affecting career opportunities for entry-level legal professionals.

(d) Quality of the data will not always be up to standard and will lack human depth and understanding

AI-generated legal insights rely on pre-existing datasets and algorithms, which may not always be accurate, comprehensive, or up to date. If AI tools analyse biased or incomplete data, they may produce misleading or incorrect legal recommendations. In practice, most AI programmes do not have access to real-time data. This means that AI will not pick up on any recent repeals, amendments or publications of new legislation. Therefore, the accuracy of this legal data generated by AI may be jeopardised based on the lack of updates.

Ownership of AI-generated information or data

AI-generated legal documents, case predictions, and research findings raise concerns about legal accountability. Given that AI compiles information from multiple sources, determining the original ownership of data and ensuring compliance with intellectual property laws can be challenging. Furthermore, if an AI-powered system provides inaccurate legal advice that results in negative consequences for a client, it may be unclear whether it is the law firm, the software developer, or the AI itself who bears responsibility.

From a practical perspective, accountability for providing inaccurate legal advice should be borne by the relevant law firm that issued such advice. With regards to ownership, it is arguable that a law firm that retrieves information from AI, customises the information to suit the relevant client’s needs and issues tailored advice based on the client’s needs, can claim ownership of the information.

Data Collection and Processing

AI uses the method of processing to retain data and in some instances, personal data. An interpretation of the definition of a data controller and data processor may also suggest that AI acts as the data processor, but the entity or owner of the specific programme is the data controller.
Aside from functioning as a data processor, AI also analyses the data it collects for future improvements and reference. For example, AI platforms such as Chat GPT, use the content from questions as a measure of data collection rather than simply storing the information; the programme relies on collective human intelligence to become more intelligent. 

Conclusion

While AI offers users immediate access to information, its accuracy is not always guaranteed. AI should be viewed as a tool that supports success, rather than the key to achieving it. While integrating AI into a law firm may be essential, over-reliance on it could potentially lead to a significant decline in the use of human judgement and have an impact on the legal industry as a whole.