ChatGPT, Esquire: AI And Law Firm Risk Management With Jeff Cunningham

In Season 9, Episode 4 of “Notes to My (Legal) Self,” I had the pleasure of diving into the world of AI, ethics, and law firm risk management with Jeff Cunningham, a general counsel specializing in ethics and risk management for law firms. This lively discussion covered everything from the Apple logo on his blog to deep fakes, document retention, and the existential threat AI poses — not to lawyers, but to the billable hour.

The Ethics Of Hoarding: Letting Go Of Legal Documents

Jeff’s contribution to our discussion started with a topic lawyers seldom enjoy: document retention. His advice? Less is more.

“Lawyers hoard information,” Jeff noted, comparing this tendency to the way many of us amass digital photos we’ll never review. The problem with hoarding isn’t just storage costs — it’s the potential risk of retaining data you no longer need.

Key takeaway: You can’t lose what you don’t have. Develop a clear retention policy, dispose of unnecessary data, and focus on safeguarding what’s truly essential.

The AI Spectrum: Ban, Embrace, Or Shrug?

Jeff painted a picture of three types of law firms when it comes to AI:

1. The Banners. Firms that try to outright ban AI, despite its ubiquity in tools like Westlaw, Lexis, and Google.
2. The Embracers. Tech-savvy firms actively exploring AI’s potential.
3. The Indifferent Majority. Firms leaving AI adoption to individual discretion.

While banning AI might seem like a way to avoid risk, Jeff argued it’s both impractical and shortsighted. AI is already pervasive, and banning it outright doesn’t prevent its use — it just drives it underground.

Instead, Jeff recommended a middle-ground approach: crafting an AI policy that provides clear guidelines while empowering lawyers to use AI responsibly.

What Should Be In An AI Policy?

When it comes to crafting an AI policy, Jeff highlighted a few key components:

• Define AI Clearly. Make sure everyone understands what the policy refers to. AI spans everything from eDiscovery to autocorrect.
• Client Disclosure. Be transparent with clients about AI usage. Jeff humorously noted that his engagement agreement even discloses the use of email and cloud storage.
• Confidentiality And Proprietary Information. Safeguard both client confidences and proprietary data, as both have monetary and ethical implications.

Jeff also encouraged firms to view AI policies as a foundation for education and exploration rather than as restrictive mandates.

The Ethical Landscape: AI Competence And Communication

AI presents unique ethical challenges. Jeff emphasized two critical areas of concern:

1. Competence (Rule 1.1). Lawyers must understand how to use AI tools appropriately. In the near future, failing to use AI might even be seen as a breach of competence.
2. Communication (Rule 1.4). As more firms use AI-powered chatbots for client intake, transparency becomes crucial. Prospective clients must know when they’re speaking with a machine and have the option to talk to a human when needed.

Jeff likened the eventual ubiquity of AI in legal practice to email: initially resisted, but now indispensable.

AI And The Evolution Of The Billable Hour

One of Jeff’s most provocative insights was his prediction that AI would disrupt — not jobs — but the billable hour.

“It’s going to make us so efficient,” Jeff explained, “that we won’t be able to justify the same billable hours.”

The result? A shift toward value-based billing models, where lawyers charge based on the outcomes and value they provide rather than the time they spend.

AI In The Courts: Moving At The Speed Of Trust

The discussion also touched on the courts’ relationship with AI. While courts have embraced some technological advances (e.g., video hearings during COVID-19), Jeff acknowledged they remain slow to adopt AI. Concerns about deep fakes and evidentiary reliability loom large, particularly in expedited decisions like TROs.

Jeff suggested the legal system would likely develop authentication processes for digital evidence, akin to notary stamps for signatures. However, he warned of growing pains as courts and lawyers adapt.

Final Thoughts: The Least-Painful Path To AI Adoption

As we wrapped up, Jeff offered practical advice for lawyers at any stage of AI adoption:

“Figure out one area where you can incorporate AI with minimal investment and pain,” he urged.

Whether it’s research tools like CoCounsel or back-office applications for marketing and billing, the key is to start small, experiment safely, and focus on adding value for clients.

Key Takeaways

• Document Retention. Develop clear policies to limit hoarding and mitigate risk.
• AI Policies. Provide clear guidelines, encourage responsible use, and prioritize education.
• Ethics. Competence now includes AI literacy, and transparency with clients is non-negotiable.
• Billing Evolution. AI’s efficiency will drive a shift toward value-based billing.
• Court Challenges. Authentication and reliability concerns will slow AI’s adoption in the judiciary.

The Bottom Line

AI is here to stay, and it’s already reshaping the legal profession. The lawyers and firms that succeed will be those who embrace this transformation thoughtfully, ethically, and with an eye toward adding real value — for clients, colleagues, and the courts.

Olga V. Mack is a Fellow at CodeX, The Stanford Center for Legal Informatics, and a Generative AI Editor at law.MIT. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat, Fundamentals of Smart Contract Security, and  Blockchain Value: Transforming Business Models, Society, and Communities. She is working on three books: Visual IQ for Lawyers (ABA 2024), The Rise of Product Lawyers: An Analytical Framework to Systematically Advise Your Clients Throughout the Product Lifecycle (Globe Law and Business 2024), and Legal Operations in the Age of AI and Data (Globe Law and Business 2024). You can follow Olga on LinkedIn and Twitter @olgavmack.

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