Risks of AI: how to embrace AI and mitigate the risks

September 18, 2023
Discover the risks associated with AI and how legal teams can mitigate these to embrace and use AI safely in 2023.

Artificial Intelligence (AI) is undoubtedly a powerful tool with huge potential. However, like any powerful tool, AI has its risks.

Fortunately, the benefits will far outweigh the risks, but only if they can manage the risks responsibly and adhere to AI regulations and ethics. 

Legal teams play a crucial role in mitigating the risks of AI and ensuring that AI deployment is responsible, compliant, and safe.

In this article, we’ll explore the potential risks of AI and how legal teams can proactively safeguard against them.

What are the main risks of AI use?

1. AI hallucinations

One risk of AI is the possibility of it hallucinating. AI hallucinations occur when the AI generates incorrect or misleading information

If left unchecked, these errors can have far-reaching consequences, affecting decision-making and potentially damaging a company’s reputation. 

That’s why it’s important for AI to complement your expertise, not replace it. This is especially important in complex, highly regulated professions with a low risk appetite. To mitigate this AI risk, the outputs should always be checked thoroughly and verified by professionals before being used. 

2. Algorithmic bias and discrimination

Algorithmic bias is another key risk of AI. This can occur when the data used to train or design AI is biased. This AI risk can also occur when the data used is incomplete or insufficient. 

For example, research by The Brookings Institution highlights instances where algorithmic bias has been observed in online recruitment tools, online ads, facial recognition technology, and even criminal justice algorithms.

The result of this AI risk is that individuals or groups within society are discriminated against based on the algorithm’s output. 

To mitigate this risk, you should always make sure that the AI assistant or tool you’re using has been trained properly using complete and unbiased data. 

3. Breach of Confidentiality

AI often requires access to vast amounts of data, including personal information, to function effectively. However, this poses a risk of breaching confidentiality if data is mishandled, shared improperly, or used inappropriately during AI training.

This is a huge risk for businesses, so it’s important for legal teams to do two things: 

  1. Define if, how, and when specific types of data can be fed to AI platforms
  2. Only use AI solutions that you can trust to comply with ethical and legal restrictions

We’ll cover how you can achieve both of these things in more detail shortly.

How can legal teams safeguard against AI risks in 2023?

To mitigate the risks associated with AI effectively, legal teams need to be proactive about the measures they put in place. Let’s run through what these proactive measures look like in practice, and how they can help to reduce AI risks. 

1. Establish clear rules and guidelines for use

Developing a detailed playbook that outlines how AI can be used within the organization is crucial. This playbook should encompass guidelines on data usage, privacy, compliance with regulations, and ethical considerations. 

It should also align with existing organizational policies and legal frameworks, especially those surrounding data protection and confidentiality.

In fact, it’s worth creating a separate policy on how data can be used in AI tools like ChatGPT. This should outline clearly:

  • Which types and categories of data can be fed into generative AI tools (and which can’t)
  • When to escalate requests and potential AI use cases to legal for approval
  • Which privacy and security precautions must be followed when using AI tools
  • The consequences of failing to comply with the rules set out 

2. Ensure outputs are reviewed thoroughly

Human oversight is essential when it comes to ensuring the accuracy and reliability of AI-generated outputs. This isn’t too different from reviewing the work of more junior team members, for example. 

Establishing a review process where trained individuals verify and fact-check AI-generated content can significantly reduce the risk of erroneous information being passed on or published.

This is useful for projects that involve a lot of low-value, time-consuming admin tasks, like contract management. Even when you dedicate time to reviewing the outputs, it’s still much faster (and more efficient) than taking a manual approach. 

Interested in finding out more about how AI contract management software can make creating and agreeing contracts up to ten times faster? Hit the button below to speak to a specialist. 

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3. Optimize your AI prompts to minimize errors

Improving the quality of AI-generated content can be achieved by providing well-structured and specific prompts. 

Some effective methods include breaking down text into smaller, context-rich prompts, or adding playbooks into tools to help refine the output further.

This helps AI models understand the desired output and generate more accurate and relevant information. 

4. Evaluating your AI tools carefully 

Legal teams should conduct a thorough assessment of an AI tool before your business considers adopting it.

This includes evaluating the technology's reliability, security features, compliance with legal requirements, and potential biases. Only tools that meet the stringent criteria should be adopted. 

5. Keep up to date with regulatory developments

Regular developments in AI and the rules that govern its use mean that legal teams don’t only need to comply with today’s laws. They also need to prepare for how AI regulation and AI ethics could look tomorrow.

Fortunately, there are a few resources that make this easier:

Want to find out more about how lawyers can use AI effectively in their business and safeguard against AI legal risks? Check out the resources below:

Alternatively, you can fill in the form below to find out how Juro's legal AI assistant can safely automate routine admin tasks for your business.

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