AI in Australian Legal Practice: Balancing Ethics and Efficiency

For over two centuries, the Australian legal profession has been a cornerstone in upholding the rule of law, protecting rights, and ensuring access to justice. As technology advances, artificial intelligence (AI) has emerged as a tool with significant potential — but also with notable risks. The latest guidance from The Law Society of New South Wales, the Legal Practice Board of Western Australia, and the Victorian Legal Services Board + Commissioner sheds light on expectations for lawyers adopting AI tools in their practice. While the guidance is a welcome step, it raises questions about whether it strikes the right balance between caution and the opportunities AI presents.

Why Lawyers Must Understand AI

AI tools, particularly large language models (LLMs) and foundation models, are rapidly entering legal workflows. Lawyers need to grasp both their capabilities and limitations because:

• They may use AI themselves for tasks like drafting, summarising, or research.

• Clients could seek advice on lawful AI usage or be impacted by third-party AI tools.

• Misuse or overreliance on AI could lead to breaches of ethical duties.

The legal profession’s responsibility is not diminished with AI integration; rather, lawyers must remain vigilant and accountable in how AI is applied. However, some may question whether this guidance adequately acknowledges AI’s potential to elevate access to justice and improve efficiencies in ways traditional methods cannot.

Key Ethical Considerations for Lawyers Using AI

The statement emphasizes adherence to core ethical obligations under the Legal Profession Uniform Law, Solicitors’ Conduct Rules (ASCR), and Barristers’ Conduct Rules (BR):

1. Maintaining Client Confidentiality

   • Lawyers must never input confidential or privileged client data into public AI tools like ChatGPT.

   • When using commercial AI platforms, lawyers should carefully review contractual terms to ensure data security.

2. While critical for confidentiality, this position may inadvertently limit innovation. Are there secure, regulated platforms that lawyers could adopt to mitigate risks without shutting the door on progress?

3. Providing Independent Advice

   • AI tools cannot reason, understand, or substitute human judgment.

   • Lawyers remain solely responsible for interpreting AI outputs and offering independent, reasoned legal advice.

4. This is undoubtedly true, but it also raises the question: Could AI tools, when used appropriately, enhance a lawyer’s ability to deliver advice more effectively?

5. Ensuring Honesty and Competence

   • AI tools can produce convincing but inaccurate results (‘hallucinations’). Lawyers must personally verify AI-generated content before relying on it.

   • AI cannot replace legal knowledge, diligence, or expertise.

6. There’s a fine line here — while overreliance on AI is a danger, dismissing its capacity to streamline tasks risks underutilizing its value.

7. Charging Fair and Reasonable Costs

   • Lawyers must ensure AI usage does not inflate costs due to time spent verifying or correcting outputs.

   • Transparency in billing is essential where AI has supported legal work.

8. This principle is sound, but it prompts further discussion: Should lawyers explore AI’s potential to reduce costs and, by extension, improve affordability of legal services for clients?

Practical Guidance for Law Practices

The statement advises lawyers to implement risk-based strategies and transparent policies when integrating AI into legal work:

• Develop AI Usage Policies: Define what AI tools will be used, by whom, for what purposes, and under what supervision.

• Limit AI Use to Low-Risk Tasks: Examples include drafting routine communications or structuring arguments. Avoid high-risk tasks like interpreting complex legal issues or decision-making.

• Verify AI-Generated Outputs: AI outputs must always be reviewed and verified by qualified lawyers.

• Be Transparent with Clients: Disclose when and how AI has been used in a matter, particularly if it impacts costs or outcomes.

While these recommendations are practical, they seem to focus heavily on caution rather than exploring innovative pathways for AI adoption. A more balanced approach might encourage responsible experimentation alongside safeguards.

Balancing Innovation and Caution

AI undoubtedly holds promise for improving efficiency in legal practice, but its limitations and risks require careful management. The legal profession’s core values — confidentiality, independence, competence, and fairness — remain non-negotiable.

However, the guidance, while necessary, leans heavily on restraint. Lawyers must strike a balance: embracing innovation while ensuring AI tools are used ethically, transparently, and with human oversight. This raises an important question for the profession: How can frameworks evolve to allow for cautious yet forward-thinking integration of AI?

This guidance marks an important step in aligning legal practice with emerging technology. Yet, as AI continues to evolve, the challenge will be creating frameworks that are both protective and adaptive, ensuring lawyers harness AI’s benefits while upholding their professional responsibilities.

Source: Statement on the Use of Artificial Intelligence in Australian Legal Practice, Law Society of NSW, Legal Practice Board of WA, and Victorian Legal Services Board + Commissioner.
https://www.lsbc.vic.gov.au/sites/default/files/202412/Statement%20on%20the%20use%20of%20AI%20in%20Australian%20legal%20practice_2.pdf