Canadian Lawyer

4 www.canadianlawyermag.com UPFRONT NEWS ANALYSIS AS ARTIFICIAL intelligence tools become increasingly integrated into law firms' day-to-day operations, data management has entered a new era filled with promise and risk. For a profession steeped in confidentiality and built on trust, the arrival of AI presents a challenge: how to innovate without compro- mising core ethical and legal obligations. Experts agree that the answer is adoption with eyes wide open. Lawyers and legal tech leaders say that the right approach to data management is not to abandon AI but to build smarter systems and frameworks to manage the data it relies on. Before AI: two pillars of data management Before the widespread adoption of AI, data governance in law firms centred around two primary considerations: lawyer-client confi- dentiality and the security policies imposed by clients – especially large institutional ones like banks. Colin Lachance, principal at PGYA Consulting, says AI complicates things by adding another variable. That variable is AI-backed software vendors that can gain access to this data. As a client, that means that you must trust your lawyer's data management and the process of their AI service providers. Earning trust is not as challenging for service providers with established names within the Canadian legal landscape as it is for global names. "AI introduces a potential leakage," Lachance says, adding that AI tools them- selves may be embedded in larger systems that neither lawyers nor clients control. Therefore, you need to trust the lawyer, their software vendor, and the vendors' service providers and how they manage your data. "If you have someone who says, 'I have AI that can do all these amazing things for your firm, and don't worry, OpenAI says they won't train on your data,' that alone isn't sufficient," Lachance says. He adds that this complexity is causing many firms to play it safe by limiting the kind of data they input into AI tools, even when the tools are technically secure. Law firms are wary for a good reason: the obligations to protect client data haven't changed, even if the tools have. The private cloud solution One way to overcome these issues could be storing data on private cloud servers. Before broader digitalization, where firms mostly moved their files to the cloud, they used to keep their files on the premises. Private cloud computing means using the technology to move the data back in-house without the boxes and binders. The data is still in the cloud, and you are still using resources of technology behe- moths like AWS, Google, or Microsoft, but Data privacy in the AI era As artificial intelligence transforms law firm operations, experts warn that responsible data management must keep pace – calling for smarter systems and a renewed commitment to client confidentiality, writes Branislav Urosevic "AI introduces a potential leakage" Colin Lachance, PGYA Consulting

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