Ethical Use of Artificial Intelligence in the Legal Industry: The Rules of Professional Conduct

March 22, 2018

Lawyers, due to their risk-adverse nature, are commonly thought of as slow to adopt technology. Perhaps this perception has led to a slower development of the use of artificial intelligence (AI) in the legal industry when compared to other industries like the medical field, where AI is increasingly used for medical diagnostics and robotic surgical systems. Nonetheless, Moore’s law has taught us that the development of technology doubles approximately every two years. To understand how this exponential development of technology has impacted the legal industry, let us look back at historical technological advancements that are now considered commonplace:

1950 – First computer capable of storing and running a program from memory

1964 – First desktop computer

1969 – First demonstration of computer-assisted legal research

1971 – Email created

1973 – Motorola releases the first portable phone

1975 – First laptop or personal computer that weighed 55 pounds; computer-assisted legal research installed in university law libraries

1990 – First time 100,000 online searches were conducted for computer-assisted legal research (LEXIS)

1996 – Microsoft releases Internet Mail and News 1.0 (later renamed Outlook); BlackBerry releases the first Inter@ctive Pager 900

1998 – LEXIS processes more than 600,000 searches in a day

2002 – BlackBerry smartphone released (supported email, mobile phone, text messaging, web browsing)

2007 – Release of the iPhone

2017 – iPhone uses facial recognition to unlock phones

The use of artificial intelligence in the legal industry is expanding rapidly. In fact, I have been using artificial intelligence in my legal research over the past few years through Ross Intelligence, and my firm has also been using Kira for contract review. I have also seen AI at work at a recent MCAA Global TEC conference, where AI was used to draft an answer and discovery requests in a matter of minutes. AI, like many historic developments in technology, is here to stay, and lawyers need to understand how its use can improve efficiency and accuracy while still adhering to the Model Rules of Professional Conduct (hereinafter the “Rules”).

At first glance, technology appears to be expanding at a faster pace than the legal industry’s ability to self-regulate. However, the Rules continue to provide helpful guidance despite the ever-evolving use of technology in the legal industry. The applicable Rules are:

  • Rule 1.1
  • Rule 1.5
  • Rule 1.6
  • Rule 2.1
  • Rules 5.1 - 5.3
  • Rule 5.5/ Restatement (Third) of Law Governing Lawyers § 4

Many lawyers may be surprised to hear that lawyers have an obligation to understand and embrace AI because failing to do so may result in violating Rules 1.1 and 1.5. Specifically, Rule 1.1 states that lawyers have a duty of competence that specifically encompasses staying up to date on “the benefits and risks associated with relevant technology.”[1] To date, 26 states have adopted an ethical duty of technology competence. Moreover, Rule 1.5 requires that a lawyer not enter into an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. Relevant factors to consider in determining reasonableness is time/labor, novelty of the issue, and customary fees. If using AI can reduce significantly the time it takes to conduct legal research, complete first drafts of routine documents, or review a contract for defined terms and consistency, then failing to use such technology may ultimately result in charging the client an unreasonable fee, a violation of Rule 1.5. Further, failure to understand the existence and use of such technology is not a valid excuse because failing to understand the benefits of available technology violates Rule 1.1.

Nonetheless, in embracing AI, lawyers must still exercise caution. Rule 1.6 imposes a duty of confidentiality. Further, a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent. For some AI, there is no significant risk of exposing client representation or other confidential information. However, for other AI, like contract review AI, the client’s information and proposed transaction may be part of the document that is uploaded. These risks are controlled through confidentiality agreements with third-party vendors, and by obtaining authorization to utilize AI directly from the client. However, consent must be informed, so it will be important to explain how you propose to use AI and how the client’s information is used in connection with such technology.

Further, lawyers are counselors. An attorney is required to always exercise independent professional judgment and render candid advice, including through considerations of factors other than law that might be relevant to the circumstances.[2] Accordingly, attorneys must still conduct their own diligence and reach their own conclusions in advising clients. Lawyers also have supervisory responsibilities. Under Rules 5.1 and 5.2, attorneys have a duty (whether a partner or subordinate) to ensure that the professional rules of responsibility are being followed. Further, under Rule 5.3, lawyers must ensure that nonlawyers are adhering to the rules of professional conduct. Accordingly, under these rules, lawyers must have some understanding of how AI operates and exercise independent judgment, and ultimately the outcome remains the lawyer’s responsibility.

Finally, Rule 5.5 and the Restatement (Third) of Law Governing Lawyers § 4 prohibits the unauthorized practice of law. Specifically, these rules reference “person” in requiring licensing and prohibiting lawyers from assisting a person in the unauthorized practice of law, but these rules may be interpreted to encompassing AI in the future. However, if an attorney is adhering to the other ethical responsibilities, AI alone will never be practicing law. Rather, AI will only serve as a tool for lawyers to be more efficient and accurate in their practices. Nonetheless, there have been cases where companies have advertised the use of software to prepare legal documents without the supervision of lawyers. In these cases, courts have held that such software does constitute the unauthorized practice of law.[3]

Although there is currently no case law guidance regarding the ethical use of AI in the legal industry, the Rules continue to guide lawyer conduct in an ever-changing technological environment. In short, the key ethical takeaways are to embrace AI, understand that AI should never “replace” lawyers as counselors exercising independent judgment, and that as AI evolves, it can make lawyers more efficient and accurate — which is a benefit that we are obligated to provide to our clients.

 

[1]        Rule 1.1 cmt. 8.

[2]        See Rule 2.1.

[3]        See, e.g., Baron v. City of Los Angeles, 469 P.2d 353, 357 (Cal. 1970) (defining the practice of law to include “legal advice and counsel and the preparation of legal instruments and contracts”); In re Reynoso, 477 F.3d 1117 (9th Cir. 2007) (holding software company advertising itself as a bankruptcy petition preparer was engaged in the unauthorized practice of law); Janson v. LegalZoom.com, Inc., 802 F.Supp.2d 1053 (W.D. Mo. 2011) (holding that LegalZoom products constituted the unauthorized practice of law).

 

This article was originally published in the March 2018 edition of the Emerging Industries and Technology Committee Newsletter. Participation in ABI's committees is one of the many benefits of becoming a member.  Committees provide networking and leadership opportunities.  For additional information on how you could become involved in ABI and our Committees please visit membership.abi.org.

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