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What’s New in Practical Guidance: January 2026 Highlights

2026-02-10T20:48:00Z

Explore January 2026 Practical Guidance updates, including AI governance tools, market-driven deal templates, and state-specific legal resources.(read more)

What’s New in Practical Guidance: Smarter Tools, Deeper Insights, and Expanded Coverage

2026-01-13T17:19:00Z

Practical Guidance continues to evolve to meet the real-world demands of today’s legal professionals, and December 2025 delivers one of our most robust updates yet. Across practice areas, this release focuses on what matters most to attorneys: faster issue spotting and practical resources that reflect the latest legal developments.

Bankruptcy practitioners will immediately benefit from expanded tracker coverage designed to streamline research and monitoring. New and updated trackers capture everything from recently added resources and legal developments to mega Chapter 11 filings, third-party releases in the post-Purdue Pharma landscape, and Subchapter V decisions.

In Business Entities, Practical Guidance now offers an impressive suite of corporate formation process maps covering more than 20 jurisdictions. These visual, step-by-step resources link directly to relevant practice notes and templates, helping attorneys move confidently from entity selection through organizational documents and ongoing compliance.

Capital Markets and Corporate Governance content continues to expand with broader Blue Sky law coverage—now spanning 47 states—and new risk factor guidance addressing SOFR-based interest rates and LIBOR replacement.

For Construction and Environmental attorneys, this update delivers highly practical tools, including new mechanic’s lien resource kits for Indiana, process maps for Alabama, drafting guidance tied to AIA® documents, and a growing library of sustainability-focused clauses. Environmental content is similarly forward-looking, with a new NEPA Regulations Tracker, Toxic Substances Control Act Overview materials, and more.

Labor & Employment updates emphasize jurisdiction-specific compliance, with new Q&A practice notes covering employment privacy across various cities and states, wage and hour issues in Philadelphia, workplace violence prevention, and marijuana-related employment considerations in Illinois. These resources help employers navigate increasingly complex local and state requirements with confidence.

Additional enhancements across Real Estate, Securities Litigation, Trusts & Estates, Healthcare, Civil Litigation, Commercial Transactions, and Federal Government ensure that Practical Guidance remains a single, trusted destination for actionable legal know-how. From AI-focused litigation tools, real estate templates, and more, the December update reflects a commitment to depth, relevance, and usability. View the full update here.

For the latest legal developments in your practice area, sign up for the weekly Practical Guidance Newsletter.

FAQs

What is new in Practical Guidance for December 2025?
The December 2025 release introduces expanded trackers, process maps, templates, and expert analysis across major legal practice areas.

How does Practical Guidance help attorneys work more efficiently?
It combines current legal developments with practical tools like checklists, templates, and visual workflows that connect research to action.

Which practice areas saw the biggest updates?
Bankruptcy, Business Entities, Capital Markets, Construction, Environmental, and Labor & Employment received significant new resources.

Are the updates tailored to jurisdiction-specific requirements?
Yes. Many resources, including compliance guidance and process maps, are jurisdiction-specific to reflect local legal requirements.

What’s New in Practical Guidance: November 2025 Update

2025-12-16T14:29:00Z

Explore the latest Practical Guidance updates for November 2025, including new tools, templates, and state resources for U.S. attorneys.(read more)

An Analysis of Healthcare Provisions in the One Big Beautiful Bill Act (2025)

2025-12-09T10:07:00Z

By: Neil F. Aragones, Sean Craig, Susan C. Hughes, Peter C. Miller, Rosann Torres, and Charles R. Zubrzycki, Practical Guidance

The following text is a summary of the full treatise section, available to Lexis+ AI subscribers by following this link. Not yet a Lexis+ AI subscriber? Sign up for a free trial here.

The complete treatise is published by Matthew Bender & Company, Inc.

The text discusses several healthcare-related tax and insurance reforms contained in the One Big Beautiful Bill Act (2025) and related proposals. First, it explains the expansion of the definition of a High Deductible Health Plan (HDHP) under IRC §223 to include Affordable Care Act (ACA) bronze and catastrophic plans beginning in 2026. Previously, these plans—though featuring high deductibles—did not technically qualify as HDHPs, excluding many ACA marketplace enrollees from Health Savings Account (HSA) eligibility. The amendment harmonizes the tax code with ACA plan structures and is expected to increase HSA access, though concerns persist that expanded eligibility may exacerbate underinsurance for lower-income populations.

The text then reviews proposed—but ultimately not enacted—changes to Individual Coverage Health Reimbursement Arrangements (ICHRAs). Earlier drafts of the Act would have codified ICHRAs under the new name CHOICE Arrangements, provided small employers with greater flexibility to offer CHOICE and group plans concurrently, allowed employees to use pre-tax cafeteria plan dollars to pay Exchange premiums in coordination with CHOICE, eased administrative notice requirements, and granted temporary tax credits to encourage adoption. Although these provisions were not enacted, the analysis highlights how they were designed to reduce employer administrative burden, integrate more smoothly with the ACA marketplace, and expand benefit design flexibility while also posing potential equity and regulatory compliance challenges.
The text situates these CHOICE proposals within the Senate’s historically constrained approach to HSA eligibility. The Senate has long limited HSAs to individuals enrolled in tightly defined HDHPs and resisted broader integration with ACA marketplace coverage or pre-tax premium payment structures. Even the proposed CHOICE reforms, though more flexible than existing rules, adhered to these guardrails by not automatically expanding HSA eligibility, preserving class-based distinctions for large employers, limiting cafeteria plan use, and confining tax incentives to small employers. This reflects the Senate’s incrementalist philosophy toward expanding HSAs and HRAs while maintaining fiscal discipline and risk-segmentation rules.

Another major change addressed in the text is the permanent extension of the safe harbor allowing HDHPs to cover telehealth services before the deductible without losing HSA compatibility. This relief, initially temporary during the COVID-19 pandemic, is now codified and broadly applicable, enabling HDHPs to offer pre-deductible telehealth for any condition. The amendment is intended to improve access, particularly in rural and underserved areas, and to support modern care delivery models, though some critics argue that expanded pre-deductible coverage could weaken the cost-conscious structure of HDHPs.

Finally, the text summarizes reforms related to Direct Primary Care (DPC) arrangements. Under the Act, DPC memberships are no longer considered disqualifying health coverage for HSA purposes, provided they consist solely of primary care services and charge a fixed monthly fee capped at $150 per individual or $300 per family. The Act also designates DPC fees as qualified medical expenses payable with HSA funds and provides for inflation adjustments beginning in 2027. These changes remove longstanding uncertainties that prevented many individuals from combining DPC models with HSAs, thereby supporting more preventive, patient-centered care options. Together, the reforms reflect an effort to modernize tax rules governing healthcare arrangements, reduce structural mismatches with insurance markets, and promote innovative care models while maintaining protections central to federal health policy.

New ADAM Program Dashboard Aims to Increase Public Awareness of Missing Children

2025-12-09T09:17:00Z

New ADAM Program Dashboard Aims to Increase Public Awareness of Missing Children

An interactive dashboard launched recently by LexisNexis Risk Solutions is designed to increase public access to information leading to the recovery of missing children across the country.

Powered by artificial intelligence and created to work in conjunction with the ADAM (Automated Delivery of Alerts on Missing Children) Program, the dashboard allows users to search geo-targeted alerts and view posters of missing children by location.

The ADAM Program, named in honor of Adam Walsh, who went missing at a Florida shopping mall in 1981, was designed by employees at LexisNexis Risk Solutions and donated to the National Center for Missing & Exploited Children (NCMEC) in 2000. Risk Solutions employees continue to manage the program.

Alerts and posters provided by NCMEC are distributed by the program to individuals, businesses, and organizations within a specific geographic location. The new dashboard enhances the program by allowing users to browse real-time cases and share information—including pictures of the missing children—on social media, increasing exposure of information to the public. Over 94% of missing cases distributed through the ADAM Program since its inception are resolved through photo distribution or other efforts.

“This dashboard brings a new level of accessibility to our efforts to help recover missing children,” said Trish McCall, co-founder of the ADAM Program. “For 25 years, the ADAM Program has been about quickly getting information into the hands of people who can help. Now, with the dashboard, anyone can take action right from their devices—and view missing child posters in their area which they can easily share on social media and help be part of the solution to bring missing children home.” The Program and dashboard can be accessed here.

LexisNexis supports the rule of law around the world by:

Providing products and services that enable customers to excel in the practice and business of law and help justice systems, governments, and businesses to function more effectively, efficiently, and transparently
Documenting local, national, and international laws and making them accessible in print and online to individuals and professionals in the public and private sectors
Partnering with governments and non-profit organizations to help make justice systems more efficient and transparent and
Supporting corporate citizenship initiatives that strengthen civil society and the rule of law across the globe.

How Will Employers Be Impacted by the Big Beautiful Bill? Key Provisions in the New Budget Checklist

2025-12-09T09:12:00Z

By: Davis C. Bae, Sheldon J. Blumling, Ted Boehm, Benjamin M. Ebbink, David S. Jones, and Jennifer S. Kiesewetter, Fisher & Phillips LLP

The following article is a summary of the full checklist, available to Practical Guidance subscribers by following this link. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

The complete checklist is written by Davis C. Bae, Sheldon J. Blumling, Ted Boehm, Benjamin M. Ebbink, David S. Jones, and Jennifer S. Kiesewetter, Fisher & Phillips LLP.

This checklist covers several major policy changes affecting workers, employers, and workplace compliance under recent federal legislation. It explains new federal tax exemptions that allow tipped and hourly employees to deduct portions of their overtime and tip income, a change aimed at strengthening recruitment and retention in industries such as hospitality. It also describes the introduction of stricter Medicaid work requirements requiring certain adults to complete at least 80 hours per month of employment or related qualifying activities, a shift that may influence both employee health coverage and labor force participation.

This checklist outlines multiple expansions to Health Savings Accounts, including permanent permission for pre-deductible telehealth coverage, the ability to use HSA funds for direct primary care arrangements, and newly extended HSA eligibility for individuals enrolled in ACA bronze and catastrophic plans. In addition, it notes the first increase in the dependent care FSA contribution limit in decades, raising it to $7,500 beginning in 2026. The legislation also significantly boosts funding for Immigration and Customs Enforcement, anticipating heightened workplace audits, inspections, and enforcement actions across several industries.

The checklist also addresses a substantial expansion of Immigration and Customs Enforcement (ICE) funding, which is expected to significantly intensify federal immigration enforcement activity. With ICE’s budget tripled and thousands of new enforcement personnel anticipated, the legislation signals a major increase in workplace-focused actions such as audits, I-9 inspections, and worksite raids. These efforts are expected to concentrate in industries that rely heavily on immigrant labor, including agriculture, construction, hospitality, manufacturing, and retail. As a result, employers are encouraged to strengthen compliance programs, prepare internal protocols for potential enforcement events, and proactively assess their immigration-related risks.

Lastly, the checklist highlights what the bill did not include—a proposed pause on state-level artificial intelligence legislation—meaning states will continue to develop their own AI regulatory measures even as federal lawmakers consider standalone approaches.

Energy Tax Credits and Incentives

2025-12-09T09:10:00Z

By: The Practical Guidance Team

The following article is a summary of the full practice note, available to Practical Guidance subscribers by following this link. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

The complete article is written by the Practical Guidance Attorney Team.

Energy Tax Credits and Incentives

This Energy Tax Credits and Incentives practice note provides a comprehensive overview of the federal tax credits and deductions available to businesses and individuals engaged in energy production, conservation, and clean technology development. It highlights the major provisions of the Internal Revenue Code (I.R.C.) that establish investment and production-based energy credits, including the general business credit, the investment tax credit, a variety of credits specific to renewable electricity, biofuels, and energy-efficient construction, and more. The article also outlines how these incentives interact with recent legislative changes, particularly those introduced under the Inflation Reduction Act of 2022 and Pub. L. No. 119-21 (July 4, 2025) (the One Big Beautiful Bill Act, or OBBBA).

General Business, Investment, and Energy Credits

The article begins by describing the structure of the general business credit under I.R.C. § 38 and how energy-related credits are reported on Form 3800. It then discusses the investment tax credit (Form 3468), explaining its key subcomponents: the energy credit, the qualifying advanced coal and gasification project credits, and the qualifying advanced energy project credit. Detailed treatment is given to the types of property that qualify, the percentage rates of the credit, and phaseout provisions for various renewable technologies such as solar, wind, geothermal, and biogas systems. The note emphasizes the importance of IRS guidance (including Notices 2013-29, 2018-59, and 2021-41) in determining when construction begins and how continuity requirements and safe harbors apply.

Production and Efficiency-Based Incentives

In addition to investment-based incentives, the article analyzes production and efficiency credits under I.R.C. §§ 45, 45L, 45Q, and 45H, among others. These include the renewable electricity production credit, low sulfur diesel fuel production credit, biodiesel and renewable diesel fuels credit, and the carbon oxide sequestration credit. Each credit’s eligibility criteria, filing requirements, inflation adjustments, and recapture rules are explained with cross-references to relevant IRS forms. The article notes recent regulatory developments, including the June 25, 2024, Treasury regulations implementing prevailing wage and apprenticeship requirements, as well as 2025 statutory amendments that limit or terminate certain credits, such as the energy efficient home and alternative fuel refueling property credits, effective June 30, 2026.

Policy Context and Practitioner Considerations

The practice note positions these incentives and more within the broader policy framework of U.S. energy law. It underscores Congress’s use of tax policy to drive clean energy investment, promote domestic manufacturing, and encourage carbon reduction. However, the piece also cautions that the landscape remains highly dynamic—subject to periodic legislative renewal, IRS rulemaking, and evolving interpretations of qualifying property. Practitioners are advised to monitor statutory changes closely, consult current IRS forms and guidance, and ensure compliance with recapture and recordkeeping obligations.

The above article is a summary of the full practice note which is available to Practical Guidance subscribers by following this link.

Practical Guidance subscribers may access the full article here. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

Federal Tax Reform under the One Big Beautiful Bill Act

2025-12-09T09:07:00Z

By: The Practical Guidance Team

The complete article is written by the Practical Guidance Attorney Team.

Federal Tax Reform Under the One Big Beautiful Bill Act

The Federal Tax Reform under the One Big Beautiful Bill Act practice note provides a comprehensive explanation of the sweeping tax changes enacted by Pub. L. No. 119-21—better known as the One Big Beautiful Bill Act (OBBBA or Act). It guides practitioners through the Act’s restructuring of individual, business, estate, and international tax rules, and outlines how these reforms interact with the framework established by the Tax Cuts and Jobs Act of 2017. Designed for attorneys, accountants, and compliance professionals, the practice note breaks down each statutory change, identifies practical implications, and highlights planning opportunities under the new law.

Individual Taxation

The practice note begins by describing OBBBA’s extensive updates to the individual income tax system, including the permanent extension of the TCJA tax rate structure and the increased standard deduction. It explains how new above-the-line deductions for tip income, overtime pay, and car-loan interest apply, and provides a detailed discussion of modifications to the Child Tax Credit, Earned Income Tax Credit, and itemized-deduction limitations. The note also covers targeted provisions—such as the Alaska Native whaling expense deduction—and provides analysis of inflation adjustments, thresholds, and compliance requirements.

Estate and Gift Taxation

The practice note also addresses how OBBBA reshapes transfer tax planning. It explains the permanent increase of the unified estate and gift tax exclusion, the continued role of portability, and the strategic implications for irrevocable trusts, intentionally defective grantor trusts, life insurance planning, and charitable structures. It also provides insight into the Act’s overhaul of charitable deduction rules and its significant expansion of the Qualified Small Business Stock exclusion, including new limits, holding-period tiers, and corporate asset thresholds.

Business Taxation

In addition to individual and estate and gift taxation, the practice note analyzes the primary business tax provisions enacted under the Act. This includes the permanent restoration of 100% bonus depreciation, the new full-expensing regime for production property, and the reintroduction of immediate R&E expensing under new I.R.C. § 174A. It also covers changes to business interest limitations, the permanent § 199A QBI deduction, the excess business loss rules, and the revitalized tax credits for advanced manufacturing, clean energy, and semiconductor production. Each section includes statutory references, effective dates, and practical examples.

International Tax Provisions

The practice note outlines the Act’s major updates to the federal tax rules governing income earned outside the United States. It details the restructured international tax provisions, revised deduction amounts, and new rules for claiming credits for foreign taxes. The note also discusses changes to how income is sourced, updates affecting transactions between related foreign entities, modifications to the minimum tax for large multinational businesses, the elimination of certain timing elections, and the introduction of new anti-avoidance measures. The section concludes by highlighting forthcoming compliance guidance expected from Treasury and the IRS.

Tax-Exempt and State & Local Tax Changes

Finally, the practice note analyzes the expanded excise tax rules for tax-exempt organizations, the revised endowment tax for private colleges and universities, and the temporary increase to the SALT deduction cap. It explains governing thresholds, applicability, and how these rules coordinate with existing reporting structures.

The above article is a summary of the full practice note Tax Changes under Public Law No. 119-21 (One Big, Beautiful Bill Act), which is available to Practical Guidance subscribers by following this link.

Practical Guidance subscribers may access the full article here. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

What’s New in LexisNexis Practical Guidance: October 2025 Edition

2025-11-07T15:00:00Z

Stay ahead with the latest LexisNexis Practical Guidance updates—new trackers, templates, and insights for lawyers across Bankruptcy, M&A, Data Privacy, Real Estate, and more. (read more)

What’s New in Practical Guidance: Key September 2025 Updates

2025-10-10T13:24:00Z

Explore September 2025 Practical Guidance updates, including new tools for securities, labor, real estate, trusts, and more. Stay ahead with fresh resources.(read more)

Learn About New Practical Guidance Content and Resources

2025-05-06T05:00:00Z

Review this exciting guide to some of the recent content additions to Practical Guidance, designed to help you find the tools and insights you need to work more efficiently and effectively. Practical Guidance customers, please follow this link.

For the latest legal developments in your practice area, sign up for the weekly Practical Guidance Newsletter.

Not a Practical Guidance Subscriber? Sign up for a FREE seven-day trial here to access the featured content in this guide.

Highlights include:

Corporate and M&A

New AI-Related Content

New De-SPAC Clauses

Intellectual Property & Technology

Artificial Intelligence

Artificial Intelligence (AI) Technology Legal Risks Checklist

Lexis Cares Fundraiser Aimed at Helping At-Risk Youth

2025-05-05T05:00:00Z

Several dozen LexisNexis employees helped raise nearly $1200, including matching corporate funds, for a Canadian group whose mission is to bring disparate groups together via exposure to the arts. The fundraiser, called Name that Film, was conducted as part of the Lexis Cares program, which encourages employees to participate in volunteer activities.

Project: Humanity, a Toronto-based theater company founded in 2008 by a group of young artists and activists, runs several programs for at-risk youth and community members.

The PH-Youth arm of the organization, operating in high schools and the youth shelter system, has served more than 19,000 students in its 11-year history.

Among its programs is PH 1:1, which pairs youth with professionally recognized artists for 12 weeks of free online mentorship in any artistic discipline chosen by the youth. More than 1100 mentorship sessions have been provided since June 2020. More than 350 artists currently participate in the program. A number of participants have been accepted into other arts programs after completing their mentorships.”

“PH 1:1 reaches kids who have been previously unreachable,” Daniel Chapman-Smith, executive director of Project: Humanity said.

The PH: Theatre project features Verbatim Theatre, a journalistic form of theatre that involves transforming original interview transcripts into live documentaries for the stage.

“We aim to adjust the mainstream of society so that those on the margins are fully seen and valued for their own incredible voices, stories, and persons,” the organization says in its annual report. “We believe that a sense of belonging comes from seeing yourself in society, not changing to conform to it.”

LexisCares is part of RELX Cares, a global Reed Elsevier project that supports employee and corporate engagement that makes a positive impact on society and champions the rule of law through volunteerism and giving. For more information, go to https://www.relx.com/corporate-responsibility/being-a-responsible-business/community.

For more information on Project: Humanity, go to https://www.projecthumanity.ca/

Artificial Intelligence (AI) Technology Legal Risks Checklist

2025-05-05T05:00:00Z

The following article is a summary of the full checklist, available to Practical Guidance subscribers by following this link. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

The complete checklist is written by Yasamin Parsafar, Sheppard, Mullin, Richter & Hampton LLP

This checklist provides best practices and considerations for corporations to effectively manage the legal risks associated with the development and use of artificial intelligence (AI) technologies.

The checklist addresses the issues companies and their counsel must understand in order to ensure compliance and mitigate potential legal challenges associated with AI. Notably, there are numerous considerations implicated by the development and use of AI technology, and as such this checklist is not comprehensive. The legal issues that a company will encounter depend on the type of AI development and use it engages in and its specific role in the AI ecosystem. For example, a company may be licensing their content for others to train AI, training AI models themselves, using third-party AI models as-is or fine-tuning them, or creating applications based on AI models.

Establish a Multidisciplinary AI Governance Team
- Assemble members from diverse backgrounds and roles within the company.
- Provide comprehensive education on legal, technical, and business aspects of AI.
- Ensure ongoing training to keep pace with evolving legal developments.
Define the Team’s Core Responsibilities
- Policy Creation and Implementation
  - Develop written policies covering areas such as:
    - Licensing content for AI training.
    - Collecting and using data to train, fine-tune, and augment AI models.
    - Implementing and deploying applications that leverage AI.
    - Managing the use and output of both internal and third-party AI tools.
- Employee Training and Compliance
  - Educate staff on AI risk, proper usage, and compliance issues.
  - Establish clear employee-use policies, ensuring staff understand both the rules and the reasons behind them.
- Vendor Diligence and Approval
  - Enhance standard vendor due diligence to include AI-specific issues.
  - Approve AI tools based on company-approved criteria and ensure the tools comply with established policies.
- Protection of Intellectual Property (IP)
  - Ensure that:
    - AI input data remains confidential and exclusively owned by the company.
    - Outputs from AI systems are owned by the company without inadvertently licensing rights to AI tool providers.
    - AI tools, especially code generators, do not compromise proprietary technology or trigger unwanted open‑source obligations.
Ensure Legal and Regulatory Compliance
- Comply with applicable federal, state, and international laws and guidelines, including:
  - AI‑specific laws (e.g., Colorado AI and chatbot-related laws, EU AI Act).
  - Broader laws impacting consumer protection, privacy, and specific industries (healthcare, education, transportation, etc.).
- Follow guidance from regulatory bodies such as the FTC, EEOC, FCC, SEC, USPTO, FDA, and others.
- Map, track, and audit any data used for training AI models to confirm proper rights and compliance.
Address Issues Related to Training AI Models
- Data Rights and Privacy
  - Confirm that training data is correctly licensed and compliant with privacy regulations.
  - Avoid unauthorized data scraping and ensure the data does not exceed usage permitted by existing privacy policies.
- Copyright and Infringement Risks
  - Determine whether training content is under copyright or qualifies as fair use.
  - Secure necessary licenses or assess risks if using copyrighted content for AI training.
- Bias, Discrimination, and Data Quality
  - Evaluate datasets for representativeness and bias.
  - Use proactive measures to ensure fairness and avoid discriminatory outcomes.
Build and Deploy AI Tools with Responsible AI Principles
- Emphasize transparency, accountability, and explainability in AI system design.
- Prioritize accuracy and establish mechanisms for timely error correction.
- Clearly mark and label AI‑generated (synthetic) content.
- Implement strong cybersecurity practices to safeguard AI systems.
- Avoid misleading claims about AI capabilities and ensure that the systems do not lead to algorithmic discrimination.
Use Third‑Party AI Tools Responsibly
- Perform thorough AI‑specific vendor diligence before integrating or deploying third‑party AI tools.
- Review and understand licensing terms for AI tools, including:
  - Use restrictions, confidentiality of inputs, and the disposition of ownership rights.
  - Indemnity clauses and liability for infringement or open‑source compliance issues.
- Carefully assess any AI‑generated content to determine if it requires copyright or patent considerations.
- Establish measures (such as filters or references) when using AI code generators to manage open‑source risks.
Consider Application‑Specific Issues
- Employment Decisions and Consumer Benefits
  - Ensure AI systems used for employment or consumer-facing applications do not foster bias or violate consumer protection laws.
  - Address risks such as:
    - Disproportionate impact on specific demographic groups.
    - Inaccuracies or “hallucinations” in critical decision‑making scenarios.
- Chatbots and Interactive AI Systems
  - Disclose to users when they are interacting with a chatbot.
  - Confirm compliance with relevant laws (e.g., wiretapping/eavesdropping, data privacy).
Update Contracts and Internal Policies as Needed
- Define acceptable use matrices specific to different AI tools and applications.
- Clearly specify the rights and obligations regarding the use of AI outputs.
- Ensure vendor agreements include warranties related to intellectual property protection and consumer/civil rights compliance.

This summary captures the main points to consider when forming an AI governance team and implementing policies for the responsible development, deployment, and use of AI. Practical Guidance subscribers may review the complete checklist by following this link.

Not yet a Practical Guidance subscriber? Sign up for a free trial here.

The complete checklist is written by Yasamin Parsafar, partner in the IP Practice Group at Sheppard Mullin

Using Artificial Intelligence in Corporate and M&A Legal Practice

2025-05-05T05:00:00Z

The following article is a summary of the full practice note, available to Practical Guidance subscribers by following this link. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

The article explores how artificial intelligence (AI) is reshaping the corporate and mergers & acquisitions (M&A) legal landscape. It outlines the fundamental concepts behind AI, discusses its practical applications in legal work, and addresses the challenges and ethical considerations that come with its adoption. Below is a comprehensive summary of the key points discussed.

Defining Artificial Intelligence

AI is described as computer software capable of executing specific algorithms designed to recognize patterns in large datasets. By analyzing these patterns, AI can make predictions, draw conclusions, and generate outputs that mimic human reasoning. The article explains that AI is not “intelligent” in the human sense but works through statistical and probabilistic methods driven by extensive training data.

Core Elements of AI

The article breaks down AI into four main components:

Machine Learning: This involves using algorithms and statistical models that allow AI systems to learn from data. Large language models (LLMs), such as those powering chatbots, are highlighted as examples that recognize, summarize, translate, and generate text.
Natural Language Processing (NLP): NLP enables AI to comprehend and process human language. Tools like Siri and Alexa demonstrate how AI can interpret spoken or written language.
Machine Perception: Often referred to as computer vision, this element teaches AI systems to interpret visual data, allowing them to identify patterns, objects, and even people.
Machine Control: Although this generally refers to AI’s ability to operate physical systems (such as autonomous vehicles), in legal practice, it underscores the broader idea of systems controlling processes without explicit programming.

Types of AI in Legal Practice

The article differentiates between two primary types of AI relevant to legal work:

Extractive AI: This type of AI focuses on extracting relevant data from a given set of documents. For example, it can scan contract databases to locate specific provisions, such as those related to assignments.
Generative AI (GenAI): Unlike extractive systems that pull preexisting data, generative AI creates new content—be it text, images, or audio—based on the data it has been trained on. Tools such as Lexis+AI exemplify this capability, especially when drafting or refining legal documents.

In both cases, data is the essential fuel powering these AI systems. The richer the dataset, the more effective AI becomes at identifying patterns and generating useful outputs.

Integrating AI into Corporate and M&A Practice

Meeting Client Expectations

Clients, particularly large corporate entities and in-house counsel, increasingly expect law firms to employ AI technologies to enhance efficiency and reduce costs. While some attorneys remain cautious or unfamiliar with the technology, the article stresses that failing to adopt AI could lead to competitive disadvantages.

Enhancing Legal Research

AI accelerates legal research by:

Quickly providing initial answers to basic legal questions.
Aggregating and summarizing relevant sources such as statutes, case laws, or legal articles.
Allowing iterative refinement through prompt engineering, a technique that involves crafting clear, contextual, and specific queries to optimize AI responses. For example, instead of asking a general question about due diligence issues, a well-designed prompt will include detailed context and specific objectives, leading to a more useful and precise answer.

Streamlining Drafting Processes

One of the most potent applications of AI is generating and analyzing legal documents. In corporate and M&A work, AI can be used to:

Draft comprehensive legal agreements, from board resolutions to confidentiality agreements.
Generate initial drafts that capture key terms and structures, which can then be refined by attorneys.
Assist in revising and improving existing documents by suggesting modifications to clauses or highlighting areas needing clarification.
Produce specific clauses quickly, such as anti-sandbagging provisions or material adverse effect definitions. When provided with detailed prompts, AI can produce nuanced language that meets specific transactional needs.

Supporting Due Diligence

Extractive AI plays a vital role in due diligence by:

Scanning large volumes of documents in data rooms.
Extracting key contractual provisions such as change of control or assignment clauses.
Reducing the time and expense associated with the initial document review, though the final output still requires thorough human review for accuracy.

Additional Applications

Beyond core legal tasks, AI is also useful for everyday business operations. It can:

Draft basic correspondence and emails.
Create client pitches, PowerPoint presentations, and manage time entry narratives.
Assist with data analysis in spreadsheets, generate meeting transcripts, and summarize large documents, thereby streamlining routine administrative tasks.

Addressing Key Challenges and Risks

AI Hallucinations

A significant concern is the phenomenon of hallucinations, where AI outputs may include incorrect or misleading information, such as fabricated case law or erroneous statistical associations. This occurs when the AI reaches the limits of its training data and resorts to generating statistically probable—but not necessarily accurate—outputs. The article emphasizes that:

AI-generated content should be used as a starting point.
Every output must be meticulously reviewed by a qualified attorney to verify its accuracy.

Ethical and Professional Responsibilities

Lawyers must adhere to professional standards and ethical guidelines, such as those outlined in the Model Rules of Professional Conduct. Key considerations include:

Maintaining Competence: Attorneys have a duty to remain informed about technological advancements, including AI, to ensure that their work products are both accurate and defensible.
Supervision: Attorneys must review and validate work produced by junior associates or AI systems, ensuring that it complies with professional standards and ethical obligations.
Client Disclosure: There may be a requirement to inform clients about the use of AI tools, especially if sensitive or client-specific data is being processed.

Data Privacy and Confidentiality

Given the risk of exposing client information when using AI tools—especially those that send data to external vendors—it is critical to:

Understand the data retention policies of AI service providers.
Ensure that robust cybersecurity measures are in place.
Obtain informed consent from clients where necessary to protect sensitive information.

Conclusion

The article concludes that while AI presents transformative opportunities for efficiency in legal research, drafting, and due diligence, its deployment must be balanced with careful oversight and ethical considerations. AI should be viewed as an invaluable assistant that enhances, rather than replaces, the human judgment central to legal practice. As AI technology continues to evolve and integrate into corporate and M&A practices, proactive adoption—coupled with rigorous validation and adherence to ethical standards—will be essential for legal professionals seeking to maintain their competitive edge.

This article is a summary of the full practice note, written by the Practical Guidance Corporate and M&A team, available to Practical Guidance subscribers by following this link. Not yet a Practical Guidance subscriber? Sign up for a free trial here.

Regulating AI in the Workplace in 2025

2025-05-05T05:00:00Z

The following is a summary of an article by Tom Spiggle, The Spiggle Law Firm

Summary of AI in Employment and Regulatory Frameworks

Recent years have witnessed a significant transformation in how artificial intelligence (AI) is perceived and utilized—transitioning from a futuristic concept found primarily in science fiction to an everyday tool that significantly impacts modern workplaces. With the advent of AI systems like chatbots and algorithm-based decision-making tools, companies are increasingly integrating these technologies to improve business practices. For example, Gallup reports that 93% of Fortune 500 chief human resource officers have adopted AI, while about one-third of employees are aware of their employers’ AI implementations. Despite its promise for boosting productivity and efficiency, AI’s use in recruitment and other employment contexts raises concerns about potential misuse and discrimination, prompting governments to enact laws and regulations aimed at protecting workers and job applicants.

AI in the Employment Context

IBM defines AI as technology that enables computers to simulate human capabilities such as comprehension, problem-solving, and decision-making. In the recruitment process, AI can streamline the identification and selection of candidates by processing resumes and identifying patterns that might indicate a desirable applicant. However, the reliability of such systems is not foolproof. A notorious example is the 2018 incident where Amazon’s AI hiring tool, trained on a dataset predominantly consisting of male applicants, began to favor candidates with traditionally male-associated characteristics. Although Amazon attempted to rectify the issue by modifying the algorithm to overlook gender-identifying terms, the project was eventually shelved due to persistent concerns over its effectiveness.

Regulatory Measures at the State Level

In response to concerns associated with the use of AI in employment, a number of states have introduced laws governing AI practices:

Colorado:
Colorado’s AI law, coming into full effect on February 1, 2026, is designed as a consumer protection measure targeting “high-risk” AI systems that could result in algorithmic discrimination. It applies to decisions with material legal or similarly significant effects, including hiring, promotions, and disciplinary actions. Employers using such AI systems must implement risk management policies, conduct annual impact assessments, and notify affected individuals if AI influenced decisions regarding employment or promotions. This law, however, only impacts employers with 50 or more full-time employees, and its enforcement is managed solely by the state attorney general, as it does not provide a private right of action.
Illinois:
Illinois has enacted two notable laws. The first, the Artificial Intelligence Video Interview Act (AIVIA) of 2019, governs the use of AI in analyzing video interviews. Under AIVIA, applicants must be informed about AI use, understand how the system operates, and provide consent; additionally, requests for footage deletion must be honored within 30 days. More recently, Illinois amended its Human Rights Act through HB 3773, effective January 1, 2026, which broadly prohibits employers from using AI to facilitate discrimination across all employment areas—from hiring and promotion to disciplinary measures. This legislation applies irrespective of the employer’s size and mandates transparency in AI usage.
Other States and Localities:
Additional measures include Maryland’s 2020 law that restricts the use of facial recognition during job interviews unless explicit consent is provided by an applicant. New Jersey’s guidance from the Attorney General reinforces that existing anti-discrimination laws extend to AI-driven decisions. Meanwhile, New York City’s Local Law 144, effective from 2023, limits the use of automated employment decision tools unless they have undergone recent bias audits, with audit results made publicly accessible and proper notifications given to applicants and employees.

Federal Actions and Legal Uncertainty

On the federal front, during the Biden administration, efforts largely revolved around raising awareness and establishing agency guidelines rather than imposing strict regulatory measures on AI in the workplace. A newer executive order implemented at the start of the Trump Administration, titled “Removing Barriers to American Leadership in Artificial Intelligence” seeks to promote the development and adoption of AI free from ideological biases, ensuring that federal policy continues to favor technological advancement over restrictive measures. As federal laws specific to AI in employment remain sparse, existing employment discrimination statutes, such as Title VII, are expected to remain the primary legal recourse for addressing any AI-induced discrimination.

Enforcing AI Protection Laws and Future Implications

A closely watched class-action case from California, in which an applicant alleges discriminatory practices by an AI-based employment vendor, underscores the increasing legal scrutiny of AI. This case illustrates that even if AI is not directly regulated by specific statutes, traditional anti-discrimination laws may still apply. The outcomes of such cases could significantly influence the future legal landscape, potentially reducing the need for further legislation by reinforcing the adequacy of current anti-discrimination frameworks.

In conclusion, while AI continues to revolutionize workplace practices, it simultaneously poses risks of unintended bias and discrimination. With most regulatory measures currently emerging at the state level and federal regulations remaining limited, employers face a complex and non-uniform legal environment. This legal uncertainty emphasizes the need for careful implementation and ongoing oversight of AI technologies to ensure fair and equitable treatment of all workers and job applicants.

This is a summary of an article by Tom Spiggle, founder of The Spiggle Law Firm, which specializes in labor and employment services for individuals.

This article appears in the April 2025 edition of Bender’s Labor & Employment Bulletin, 2025-4 Bender’s Labor & Employment 04 (2025).