The race to embrace artificial intelligence is on—as global economies throughout North America, Europe, and Asia introduce new players to the market and emergent capabilities such as agentic AI rapidly advance.
Across industries and geographies, organizations are working overtime to keep pace with AI and maintain a competitive edge, but those who work too quickly and without thought will ultimately be doing themselves a disservice.
The adoption of generative AI is fraught with challenges, including navigating the complex legal and regulatory landscape, which cannot be overlooked. Legal functions play a pivotal role in ensuring that organizations can deploy and scale GenAI quickly and confidently.
As enterprises sprint to develop and implement full-scale GenAI solutions, legal teams must guide organizations through the intricacies of adoption. Their involvement can inform whether it will successfully move from pilot to implementation. They provide critical insights into the legal implications of AI adoption, enabling leadership to make informed decisions about investment and deployment.
Seventy five percent of corporate board members reported having little to no experience with AI. Boards want to be confident that the legal issues and risks are being addressed upfront. Chief legal officers can also help bridge this gap to ensure boards are well-equipped to oversee generative AI efforts.
Developing a Framework for Deployment at Scale. The possibilities of GenAI are endless, but it’s critical for an organization to explore them with a firm strategy and protective guardrails in place. The legal implications are significant and multi-faceted—from IP and data challenges on inputs and outputs, to the impact on contractual relationships with customers and suppliers, all within the context of a rapidly evolving regulatory environment.
As businesses shift from experimentation to scaled AI solutions, legal functions can facilitate safe implementation by creating policies and engaging with the company to ensure the opportunities are securely realized. The legal team lays the groundwork for GenAI usage by establishing a framework for how the technology should be deployed and scaled for impact. Early involvement of the legal team helps the company avoid late-stage surprises and ensures a seamless GenAI project rollout.
This framework should include supporting processes as well as internal controls to instill confidence and enable adoption at scale. Set clear guidelines on how GenAI is leveraged productively and responsibly. This includes moving quickly beyond the prototyping phase for successful implementation and transformation of the organization.
Staying Ahead of Potential Risks. Legal functions should develop a robust incident response plan for AI-related issues, from data breaches to biased outputs. Under specific regulations such as the EU AI Act, this is a requirement—reinforcing the case for safeguarding the brand and mitigating risks that can swell into reputational damage.
With the pervasive nature of digital technology and GenAI, these risks can emerge in any part of the business or within any stakeholder group—such as an employee using publicly available tools to handle potentially sensitive company information. A comprehensive incident response plan is essential for rapid action and can significantly reduce the impact of any adverse events.
Navigating Regulatory Requirements. The regulatory landscape for AI is constantly evolving, with requirements and enforcement varying by industry, geography, and scope. It’s also rapidly expanding, encompassing topics from data privacy, confidentiality and governance to third-party contracting, intellectual property rights and management, cybersecurity requirements and managing new forms of liability and redress—all which lie with the legal team to manage and assure. The energy use of GenAI and bias risks may also impact an organization’s ESG commitments.
Legal functions that take a proactive approach between overlapping regulatory systems and requirements can limit the regulatory burden and help their organization stay ahead of these changes to focus on innovation and transformation.
Spearheading Cross-Functional Implementation. Only 36% of CLOs say their organizations have cross-functional teams executing on generative AI issues. Legal functions must have a seat at the table to provide the foundation for AI adoption, such as supporting broader collaboration and bringing together stakeholders. When brought in early on, legal can unite teams to calibrate risks, set clear guidelines, kick-start the necessary contracting modifications and negotiations, and contribute to key strategies for successful implementation.
Partnering with the business and key functions including IT and HR can empower every organization member—from the entry level to the C-level—on what can and can’t be done with GenAI to advance business outcomes. Legal can help accelerate current and proposed uses of GenAI throughout the ecosystem, including data sources, training models, and user access.
Lead from the Front. Generative AI offers significant potential for legal teams themselves to provide more insight to the business—and to drive more integration and efficiency in legal service delivery. Forward-thinking CLOs are now embarking on an AI-enabled legal function transformation. Doing so equips legal teams with practical hands-on experience of working with GenAI, and by doing so, they have greater credibility with the business as they provide the critical enabler and stewardship roles for broader transformation.
Embracing GenAI may pose complexity—strategically, operationally, and financially—but a company’s greatest risk isn’t using it at all. Companies failing to adopt generative AI may risk falling behind their competitors and key stakeholders. Now is the time to realize the benefits—and the legal function has a critical role to play in enabling that success.
In fact, 79% of CEOs expect GenAI to transform their organizations in the next three years, and 93% of CLOs believe it has the potential to bring value to their organizations in the next 12 months. Yet nearly 70% of CEOs say their organization has only been able to move 30% or less of their GenAI experiments into adoption—and legal functions can help cut through some of the constraints.
There are many important players in the journey to deploy and scale GenAI, and legal should be front and center to reap the benefits of a thoughtful, responsible, and well-executed GenAI strategy.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Richard Punt is global legal leader at Deloitte and leads the growth and transformation of Deloitte Legal’s global network of nearly 3,000 legal professionals operating in more than 75 jurisdictions.
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