Using AI for Legal Matters: When It Can Cost You More Than It Saves
AI tools like ChatGPT are becoming part of everyday business. From drafting emails and contracts to researching legal issues, many businesses are using AI in the hope of saving time and cutting costs.
Used well, AI can be a useful starting point, but relying on it instead of professional legal advice can create hidden risks, increase costs, expose confidential information and make a legal issue much harder to resolve.
AI can increase legal costs rather than reduce them
Many businesses use AI to draft contract amendments, prepare legal correspondence, or research their legal position before instructing a solicitor. While the intention is often to save on legal fees, the reality can often be different.
AI-generated documents can contain inaccurate legal information, miss important context specific to your situation, or use language that is unclear or inappropriate for the circumstances.
A solicitor then has to unpick, correct, and restructure the document before the matter can progress. That additional work takes time, often more time than preparing the document properly from the outset, meaning the fees you were trying to avoid can end up higher.
For example, a business might use AI to amend a commercial contract before sending it to the other party. If those amendments unintentionally change the meaning of an important clause, the result can be lengthy negotiations and additional legal work to put matters right.
The same issue can arise when the other party is relying on AI, rather than professional legal advice. Poorly drafted correspondence or incorrect legal arguments can lead to unnecessary back-and-forth, prolong negotiations, and increase costs for everyone involved.
Confidentiality is a risk
Many AI platforms require users to input information to generate a response, but not everyone realises the potential implications of sharing sensitive business information.
This could include:
- Commercially sensitive business information
- Details of a live dispute or negotiation
- Draft contracts
- Information that may be legally privileged
Depending on the platform and its settings, you may have limited visibility over how that data is stored or used.
By contrast, solicitors are bound by strict professional duties of confidentiality and regulatory obligations designed to protect client information.
AI can’t replace professional judgement
AI can generate information quickly, but it can’t understand the wider commercial context behind a legal issue. It doesn’t know your business, your appetite for risk, or your long-term objectives, and it cannot weigh up competing commercial priorities or exercise professional judgement based on experience.
AI may also produce responses that are incomplete, out of date or fail to reflect recent legal developments. Without specialist knowledge, it can be difficult to recognise when an answer is inaccurate or misleading.
Unlike a solicitor, AI also carries no professional responsibility for the advice it generates, so there is no accountability if the information is wrong.
How businesses can use AI more responsibly and effectively
AI does have a place in business. It can be useful for generating ideas, summarising information, or explaining unfamiliar legal terminology before seeking advice. However, it shouldn’t replace legal expertise when making important commercial decisions, negotiating contracts, or dealing with disputes.
Getting legal advice at an early stage often proves the more efficient and cost-effective approach. Experienced solicitors can identify risks, interpret legal and commercial nuances, and provide advice that reflects the realities of your business, helping to prevent costly issues arising later.
Before relying on AI for a legal matter, consider:
- Am I sharing confidential or commercially sensitive information?
- Could this document have legal or financial consequences?
- Am I relying on AI to interpret the law or make legal decisions?
- Would a solicitor identify risks or opportunities that AI might miss?
If you’re unsure whether something you have drafted using AI could create legal or commercial risk, it’s often worth having it reviewed before taking things further. A quick conversation at an early stage can save considerable time, cost, and uncertainty later on. Speak to our team on 024 7663 2121 or email info@bandhattonbutton.com.