AI issues generating business for Indiana law firms

As quickly as artificial intelligence has become a presence in our lives, that’s how fast AI has become a focus for law firms and their clients.

AI-related labor and employment issues, patents, technology transactions and licensing are just some of the areas bringing in business to law firms. João Marinotti, associate professor of law at the Indiana University Maurer School of Law, said AI has created “two big buckets of legal work.”

“One is the intellectual property side, where companies, publishers, owners of intellectual property are suing AI companies for using the training data or for not preventing their models from living in alleged intellectual property violations,” he said.

The second is the compliance side, Marinotti said, which is growing because of privacy and cybersecurity issues.

“It used to be the case that small businesses didn’t have to care about this, and then all of a sudden, everyone has to deal with all sorts of national and international regulations,” he said. “Even small businesses that have websites in the United States have to care about General Data Protection Regulation compliance if they’re potentially going to have international clients visiting their website.”

General Data Protection Regulation is a 2018 European Union law focused on protecting the privacy and security of personal data for individuals within the EU and European Economic Area. The law extends to all organizations that handle data of EU residents. Last month, the EU introduced the General Purpose AI Code of Practice, a voluntary compliance code to allow companies to ease into required changes and disclosures ahead of a 2027 enforcement deadline. Because of its wide reach, some are saying the EU’s regulations of artificial intelligence could set international standards.

With cities, states and countries passing laws related to AI, businesses are increasingly turning to their legal representatives for advice.

Tech, law experience

Matthew Schantz, a patent attorney who leads the technology transactions team at Frost Brown Todd, said he’s seen a lot of AI-related business that involves software agreements and patents, in areas that include finance, fintech and industrial operations where industrial equipment is using machine learning to perform more optimally.

Schantz is part of a collaborative cross-practice team that’s been meeting regularly for roughly two years to share news, updates and legal changes as AI regulations are passed in various jurisdictions.

“When ChatGPT took the news by storm outside tech circles, we saw that this is a big thing, this is going to make changes in how our clients do business,” he said.

Among his AI-related concerns is that if writers and other creators can have their work used to train something that can replace them, the incentive for creating work will decrease substantially.

“That wouldn’t be great for society,” he said.

Schantz dealt with AI matters when he was an undergraduate at Purdue University and worked for the U.S. Department of Defense, but AI became part of his legal career much later. He said he enjoys reading up on AI and related technology, and that makes him more valuable to his clients.

“Clients need legal advice,” he said, “but legal advice that understands the underlying technology is better legal advice. So that’s what I try for.”

Shelley Jackson, who leads the labor and employment practice group at Krieg DeVault LLP, said her focus on artificial intelligence ramped up over the last couple of years in conjunction with its explosion commercially. She has substantial expertise in privacy and data security—she’s a former chief privacy officer—and does a lot of work with clients to evaluate their privacy-related risk regarding health care information and consumer data.

“Artificial intelligence has shaped the issues that we are working [on] with clients,” she said, “but it hasn’t changed the fundamental nature of our work. What has evolved are the types of issues that clients may bring to us. For example, in the labor and employment space, you have employers who are utilizing artificial-intelligence-supported technology to enhance their recruiting activities.”

She shared an example of a company that receives 150 resumes for a particular position. At one point, reading through those resumes required a lot of staff time. Now, there are AI programs that can identify qualified candidates in seconds.

“But you should be careful to understand how those ‘qualified candidates’ are being selected so you don’t inadvertently walk into allegations that you have somehow selected candidates in a way that is discriminatory, or otherwise unlawful,” she said. “Risk management surrounding recruiting activities is a good example of how AI influences our analysis but hasn’t fundamentally changed our job as lawyers.”

Robin Dunn, a patent attorney with Taft, said a lot of clients he’s representing that have AI concerns are longtime clients—from many industries—that are starting to incorporate AI into their analytics or to improve processing in different contexts.

“I don’t know that I’ve personally handled things in every industry,” he said, “but I know that AI issues are coming up in every industry. The circumstances I’m dealing with are risk mitigation or financial predictions, things like that. Clients are certainly using AI all these sorts of ways, and then some of them are also trying to patent it in certain ways.”

Some clients, like insurance companies, might use AI to determine the risk factor that a particular prospective customer or property is to insure. Banks might use it to assess the risk that a customer will default.

“AI allows the use of really complicated algorithms that can improve themselves over time,” he said.

Dunn said AI-related issues have tended to fall to him because of his background, which includes a bachelor’s in mathematics with a minor in physics and a master’s in electrical and computer engineering.

“Complex algorithms have always been a sweet spot for me,” he said. “So, as a young associate, anytime something with complex math came up, it just kind of naturally migrated to me. AI, at first, involved things like cryptography, but then, as AI started becoming a little bit more popular, it was a natural fit for me.”

Streamlining work

Just as clients have concerns about AI, so do law firms themselves. One is that potential clients, to save money, will use AI to draft documents that were once the purview of lawyers.

Schantz, of Frost Brown Todd, said, and others echoed: “I think the lower expense would be appealing to a lot of people, but the reduced quality relative to an experienced human lawyer is substantial. And so, I think [AI will] maybe open up lots of markets—not just legal services—to cheaper and less-quality products and services. But I think people will miss out on the higher-quality goods and services, and it’ll be tough for those offering the higher-quality goods and services to differentiate themselves in the marketplace.”

Brian Beck sees the situation differently. Beck, a legal technology executive for LexisNexis, the information and analytics firm, consults with the legal profession on how to use AI to its benefit.

Beck said AI, when used correctly, can give lawyers the opportunity to eliminate the grunt work. He told the story of an attorney who was trying to draft a horse-boarding agreement for a client who is a farmer. The lawyer had spent weeks trying to find a similar document he could use as a model for the agreement, without much success.

“I typed in ‘draft the horse boarding agreement’ and maybe a couple [of] other details that he said,” Beck said. “We waited maybe a minute, and it kicked out, like, a 10- or 15-page horse-boarding agreement. And [the attorney] literally said, ‘Well, hell, I’m going fishing for the rest of the day.’

“It’s incredibly impressive,” he said, “to be able to get a specific legal question answered—and even a legal memo created—in a couple of minutes.”•