5 ways malpractice insurers say law firms can reduce AI risk

As lawyers receive censure for citing cases hallucinated by artificial intelligence, insurance professionals and legal technology experts interviewed by The Daily Record offered several recommendations for law firms adopting generative AI.

Develop a written AI policy

Al Roberts, who heads professional liability underwriting for Berkley Select, said firms should establish formal AI-use policies rather than allowing lawyers and staff to determine their own practices.

He encourages business leaders to establish firmwide guidelines identifying approved AI tools, permissible uses and required review procedures.

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Verify everything

Chris Newbold, chief operating officer and executive vice president of ALPS, a Montana-based lawyers’ professional liability insurer that sells in Maryland, emphasized that lawyers remain responsible for verifying their work, even when AI is used.

Lee Norcross, president of L Squared Insurance Agency, a nationwide, Michigan-headquartered insurance broker that also sells in the Old Line State, similarly warned that attorneys can be sanctioned or face professional discipline for failing to verify AI-generated work.

Treat AI-generated work as a first draft, not a final product, they advise. Independently verify every citation, quotation, factual statement and legal conclusion before relying on it in client work or court filings.

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Protect client confidentiality

Roberts said firms should consider closed or controlled AI environments designed to prevent client information from being disclosed, retained for training or exposed outside the firm.

Newbold similarly cautioned lawyers against putting confidential information into free, publicly available AI platforms.

Train lawyers and staff

Tom Martin, creator of CiteCheck AI, said lawyers need to educate themselves about how AI systems work before using them. They need to understand AI’s capabilities and limitations, applicable ethics requirements and firm policies.

Roberts also noted attorneys need to understand any ethics requirements governing AI use in each jurisdiction where they practice.

Remember that professional judgment cannot be delegated

AI can improve efficiency, but it cannot replace a lawyer’s independent legal judgment, the experts said. Attorneys — not the technology — remain responsible for the accuracy of their work product. Newbold said lawyers continue to “own the judgment, the verification and the work product” when they use AI.