The rapid emergence and evolution of Artificial Intelligence (AI) in corporate and legal realms has necessitated a focus on phenomena known as Shadow AI. The rise of Shadow AI involves the use of AI-related applications by employees or departments within an organization, often without the knowledge or authorization of their respective IT or security groups. This behaviour harks back to the era of Shadow IT, as it similarly risks the security of sensitive business data and confidentiality. Above the Law discusses this prevalent issue in depth.
One of the key challenges faced by law firms today is a lack of knowledge and monitoring capabilities concerning the use of AI applications within their internal operations—a problem that has only amplified with the unexpected rise of Shadow AI. In 2023, amidst the rampant adoption of generative AI technologies by lawyers, a resulting shift in discourse ensued concerning governance and control of AI utilization within legal firms.
In short, many law firms are in the dark when it comes to knowing how many of their employees or departments are using AI applications. While this issue is somewhat mitigated in larger law firms, many still lack concrete policy measures that regulate and track AI use. Furthermore, organizations are often reticent to probe or disclose Shadow IT and Shadow AI operations due to associated security concerns and potential internal data leaks.
Serving as a case in point, Samsung, in 2023, had to issue a temporary ban on unauthorized AI applications following an internal data leak. This action underlines the crucial need for regulation and internal control measures in managing AI usage within organizations, given that unauthorized use not only jeopardizes data security but can also essentially undermine essential business operations.
So why is identifying and tracking Shadow AI so difficult? For starters, AI is pervasive and often embedded in a myriad of legal and business applications such as video conferencing tools, legal research tools, e-discovery software, browsers, smartphones, to name a few. As such, it can be challenging to recognize when and where we are using AI in the course of our business activities.
This extensive normalization and prevalence of AI has led to a further conundrum—many employees are unaware of the potential security risks associated with their use of AI tools, often because they mistakenly believe these tools are either harmless or even beneficial to their work. This misconception is particularly prevalent when it comes to generative AI, such as those used by various major law firms.
Given these ever-evolving complexities of AI usage, it is strongly recommended that law firms should develop comprehensive AI usage policies. Such policies should cover usage requirements, authorization processes, ethical considerations, and most importantly, they should consider the data privacy laws and cybersecurity regulations in place. Developing such policies will not only guide the ethical and responsible usage of AI but also help combat instances of Shadow AI within firms.
In addition to policies, another tool to combat Shadow AI is employee training. Periodic awareness and training sessions around the potential dangers and ethical implications of Shadow AI usage can go a long way in alleviating associated risks. After all, while policy development is essential, ensuring employees are informed and educated on its content and rationale is equally critical.
In conclusion, while AI can provide many incredible benefits, it’s crucial to approach its adoption and regulation with patience and caution. Living in an era where rogue behaviour and data breaches are becoming alarmingly common, law firms must have a clear plan to handle potential Shadow AI issues.