Generative AI Versus Agentic AI: Navigating The AI Frontier For In-House Counsel

Artificial intelligence has gone from science fiction to boardroom reality, and if you’re an in-house lawyer, chances are you’re grappling with its implications already. The rise of Generative AI and Agentic AI isn’t just reshaping industries; it’s creating legal and ethical questions that demand attention. What exactly are these two AI categories, and why does it matter for your role? Let’s dive into the nuances, implications, and how to stay ahead in this rapidly evolving landscape.

Generative AI: The Creative Powerhouse

Generative AI excels at producing new content—text, images, music, and more—based on patterns it’s learned from vast amounts of data. Imagine drafting a contract and, instead of starting from scratch, a tool like ChatGPT generates a well-structured template in seconds. Or picture DALL-E transforming your ideas into compelling visual prototypes.

Its brilliance comes with boundaries. Generative AI doesn’t think for itself. It’s reactive and task-specific, operating strictly within the parameters of its training. It’s like having a supercharged assistant—great at executing commands but not equipped to think strategically or adapt on its own.

Agentic AI: The Autonomous Strategist

Agentic AI takes intelligence to the next level. Unlike Generative AI, it doesn’t wait for instructions. It can perceive its environment, set goals, and adapt as situations change. Picture an autonomous vehicle navigating a bustling city. It continuously assesses its surroundings, anticipates obstacles, and makes split-second decisions to ensure safety. Or imagine an AI project manager reallocating resources and adjusting deadlines without human intervention.

Agentic AI is proactive and dynamic, making it a game-changer for complex, evolving challenges. But its autonomy introduces higher stakes for liability and compliance. Who’s responsible when Agentic AI makes a mistake? That’s a question many in-house lawyers are wrestling with.

Why It Matters for Legal Teams

The difference between Generative and Agentic AI isn’t just technical—it’s legal and ethical. Generative AI might generate a flawed contract template or plagiarize a snippet of code, and accountability is typically straightforward. Agentic AI, on the other hand, raises thornier issues. What happens when an autonomous system misinterprets data and causes harm? Who’s liable when it makes decisions no human anticipated?

These distinctions drive everything from how you structure contracts with AI vendors to how you approach regulatory compliance and governance.

The Legal Questions You Can’t Ignore

Imagine a Generative AI drafting a marketing campaign. If it plagiarizes another company’s slogan, it’s an IP issue. With clear safeguards and review processes, you can usually mitigate these risks.

Now consider Agentic AI in healthcare. If an AI system misdiagnoses a patient due to a flawed algorithm, liability could implicate developers, providers, or even regulators. The stakes are higher, and so are the complexities.

Then there’s privacy. Generative AI might process personal data, raising compliance issues under frameworks like GDPR. But Agentic AI could collect and analyze data autonomously, introducing unpredictable risks that demand even stricter safeguards.

How In-House Counsel Can Stay Ahead

Get a clear picture of the AI systems your company uses. Are they reactive (Generative) or autonomous (Agentic)? Review contracts to ensure they address liability for errors or misuse, and include provisions for regular audits and compliance checks.

Develop internal policies with clear guidelines for AI use, focusing on data privacy, bias mitigation, and ethical accountability. Engage with cross-functional teams like IT, compliance, and risk management to ensure alignment. Stay informed about evolving regulations like the EU AI Act, which sets stricter rules for high-risk AI applications often tied to Agentic AI.

Looking Ahead

Generative AI and Agentic AI are redefining how businesses innovate and operate. Generative AI offers incredible efficiency for tasks like drafting documents or creating content, while Agentic AI opens the door to autonomous decision-making and adaptation. But with this power comes responsibility, and in-house lawyers are uniquely positioned to guide their organizations through the legal, ethical, and regulatory challenges ahead.

For deeper insights into navigating these complexities, my book, Product Counsel: Advise, Innovate, and Inspire, provides practical strategies for balancing innovation with legal oversight. Whether you’re advising on cutting-edge technologies or building frameworks for responsible AI governance, the book is a resource to help you lead with confidence.

How is your organization adapting to AI? Have you encountered unexpected challenges?

Let’s keep the conversation going — share your thoughts and stories.

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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