Navigating the Legal Landscape of Generative AI: In-House Counsel's Guide

At the recent Women, Influence & Power in Law 2024 Conference in Chicago, women working on corporate legal teams discussed a number of timely issues bearing down on in-house counsel today. One of the more intriguing threads of discussion emerged in a session focused on the adoption of generative artificial intelligence (Gen AI) technologies in their organizations.

“Sometimes there’s a misperception that certain highly regulated industries are slow to react to technology … (because) regulations can often hinder our business’ eagerness to try new things,” said Julia Riley, assistant general counsel at Bank of America, in a story published by LegalTech News. “But it can also provide road maps or existing frameworks that are already prepared and ready to address many of the issues that we see in things like AI.”

In-house counsel at companies across all sectors—and especially those in highly regulated industries—have been appropriately cautious in their adoption of Gen AI technologies. Unfortunately, there appears to be a misalignment emerging between top legal officers and other executives within some companies.

Corporate Disconnect on Generative AI Adoption: Risks and Challenges

A September 2024 survey by Littler Mendelson PC gathered insights from more than 300 executives across the U.S.. Among the findings:52% of top legal officers said their organizations were not using AI tools in Human Resources, for example, but only 31% of CEOs said their companies were not using Gen AI in hiring and—most concerning—a mere 18% of HR executives said they were not using the tools.

“That suggests that 82% of Human Resources departments are using AI while about half of their legal chiefs don’t even know about it,” reported Law360. “These discrepancies among executives pose challenges for effective AI risk management.”

The survey found similar disconnects between in-house counsel and senior executives on other Gen AI applications, such as auditing and automated monitoring.

Best Practices for Integrating Generative AI in the Workplace

In-house counsel need to take the lead in rectifying this possible misalignment and ensuring their organizations have best practices in place for adopting Gen AI tools in the workplace.

Joseph O’Keefe, Edward Young and Hannah Morris—Practical Guidance contributors for LexisNexis®—published an insightful practice note, “Artificial Intelligence in the Workplace: Best Practices,” which contains some guidance on the legal implications of integrating Gen AI into the business:

1. Train employees on how Gen AI is used

If an employer permits its workers to use Gen AI for work-related purposes, it should train them on how to use the technology in a way that protects the employer’s business, legal and other interests. For example, it would be beneficial to inform trainees that they must still always comply with other employer policies, such as a policy against harassment and discrimination.

2. Incorporate Gen AI into corporate policies

It’s important for employers to communicate their stance on the use of Gen AI explicitly to employees, either through a handbook or standalone policy. Employers can add relevant Gen AI language into a new policy or incorporate such language into an existing computer of electronic systems policy.

3. Approve Gen AI tools before use

Employers should make clear that employees should only use Gen AI to enhance or assist in the performance of job-related tasks by enhancing productivity, efficiency and decision-making. For example, they should remind employees that all of its policies involving non-discrimination, anti-harassment and confidentiality still apply when using Gen AI. They may want to consider implementing an approval process whereby employees report to a specific point person to request use of a Gen AI tool.

4. Continuously monitor Gen AI use

Even when an employer sets parameters on Gen AI in the company, the employer should regularly review whether measures in place are working or need to be revised, based on reasons such as employee non-compliance or lowered productivity. In addition, as more laws regulating Gen AI are passed and implemented, employers should make sure their policies comply with any specific jurisdictional requirements.

5. Implement a reporting procedure

Finally, employers should develop a procedure for employees to report suspected violations of an employer’s AI policies, possible data breaches, a Gen AI system failure or instances where the Gen AI tool generates erroneous, discriminatory or harassing output. The employer should also notify employees that it may impose disciplinary consequences — up to and including termination — for employees who violate the Gen AI company policies.

Gen AI Resources for In-House Counsel

The Practical Guidance team at LexisNexis has released the Generative Artificial Intelligence Resource Kit, a comprehensive collection of information resources that examine the key legal issues related to the adoption and use of Gen AI technologies. Key content for in-house counsel includes:

• A practice note that provides an overview of key legal issues;
• A template that can be used to create a workplace policy governing the use of AI-driven tools in the workplace; and
• A tracker that provides weekly updates on federal legislation pertaining to the deployment of Gen AI technologies.

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