American Bar Association Issues Guidance on Ethical Use of GAI in Legal Services

On July 29, 2024, the American Bar Association (“ABA”) Standing Committee on Ethics and Professional Responsibility released Formal Opinion 512. This marks the ABA’s first guidance regarding using generative artificial intelligence (“GAI”) in providing legal services. GAI, which learns from its data to enhance the efficiency and quality of client legal services, has prompted the need for ethical guidelines in its utilization within the legal profession.

ABA Formal Opinions are interpretations of the ABA “Model Rules of Professional Responsibility” and, while influential, are not binding on any court or disciplinary body.

Formal Opinion 512

Formal Opinion 512 (the “Opinion”) focuses on GAI use in lawyers’ duties to provide competent legal representation, protect client information, communicate effectively with clients, ensure candor toward the tribunal, supervise employees and agents, and charge reasonable fees. Below is an overview of the key points addressed in Formal Opinion 512. The full Opinion can be found here.

Competence

The Opinion stresses the importance of understanding and assessing new technologies, particularly GAI tools. While lawyers do not need to be GAI experts, they are expected to understand the specific GAI they use. It emphasized that GAI tools complement, but do not replace, a lawyer’s judgment and experience, particularly in advising clients and creating legal documents. Lawyers must independently verify or review GAI outputs before relying on them.

Confidentiality

Protecting client information is critical, especially when using GAI tools. Lawyers are advised to assess the risks of GAI tools and prioritize data security to avoid potential disclosure risks outside and inside the firm, for example, to other firm attorneys barred behind an ethical wall or who inadvertently use confidential information to help another client. Because of this, informed consent must be obtained from clients before utilizing GAI tools. Adding a general, boilerplate provision to engagement letters is insufficient to obtain informed consent.

Communication

The Opinion clarifies that transparent communication with clients includes discussing the use of GAI tools as relevant to the legal services being provided. Use of GAI must be disclosed when clients inquire about the completion of work, when it is stipulated in client agreements or when mandated by guidelines from other legal counselors, if the use of GAI impacts the reasonableness of fees, or if the output of the GAI tool influences a significant decision in the representation.

Candor Toward the Tribunal

Lawyers are cautioned about the ethical implications of using GAI in litigation, particularly submitting arguments unsupported by fact or legal authority, knowingly making false statements of law or facts, failing to correct previously submitted false statements of law or facts, and engaging in intentional or unintentional misrepresentation. Lawyers using GAI have submitted citations to phantom cases, prompting some courts to require disclosure of GAI use. Lawyers must review GAI outputs for accuracy, correct errors, and ensure that assertions are not false.

Supervisory Responsibilities

For lawyers supervising or managing subordinate attorneys and non-legal staff, the Opinion stresses the importance of implementing clear policies for using GAI tools and providing comprehensive training on ethical issues, data handling security, and privacy and confidentiality best practices. These ethical duties of supervision also apply to third-party use of GAI tools. Lawyers must ensure that the GAI tools used by third parties are designed to protect privacy and security, consider how they handle and store information, and assess their susceptibility to cyber-attacks.

Fees

Lawyers must be transparent about their fees and expenses and provide a written breakdown for their clients. If GAI is permissibly excluded from firm overhead (in accordance with ABA guidance), the basis for the additional charge must explained to the client in advance, preferably in writing. Additionally, lawyers may only charge for time worked, even if GAI reduces the time needed to complete client work. Lawyers may not charge clients for time spent learning how to use a GAI tool or service unless a client specifically requests that a specific GAI tool be used for their work and the lawyer does not know how to use it.

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Law practice is experiencing rapid transformation with the increasing integration of GAI tools, and the release of Formal Opinion 512 by the ABA marks a significant step towards addressing the ethical considerations surrounding using GAI in legal services. The Opinion guidelines provide valuable direction for using GAI to complement the skills and expertise of legal practitioners while upholding the profession’s ethical standards and obligations to clients.