The role of Artificial Intelligence (AI) is growing rapidly, but as RMB Partner MICHAEL LEWIS explains, reliance on AI-generated legal documents could expose you or your business to significant risk and expense.
Australian businesses are always looking for efficiency and cost savings so it’s understandable they are tempted to outsource administrative tasks to AI.
However, relying on AI-generated legal documents could be dangerous.
AI platforms like ChatGPT gather and process information from all corners of the internet. When you ask AI to draft something like a commercial lease agreement, a contract for the sale of your business, a new employment contract, or even an agreement for construction services, the platform will analyse a wide range of internet documents and inputs to generate its response.
This may sound good in theory. However, once you apply this document to your specific scenario, this “general knowledge” approach is likely to create some significant risks.
Jurisdiction Blind Spots
Legal systems are not uniform around the globe, or even between Australia’s states. An AI-drafted commercial lease, drawing from a global dataset, doesn’t understand the specific landscape of NSW. It could draft a clause that’s irrelevant, unenforceable or even illegal under Australian commercial law.
Questionable Legal Authority
Just because a clause sounds professional or appears in online examples, does not necessarily mean it holds legal weight in your specific context. If we turn to the example of an employment contract, documents must comply with the Fair Work Act 2009, National Employment Standards, Modern Awards and further laws and guides specific to the type of work or industry. Any gaps or failures to implement current legal standards can seriously expose your business to a costly claim.
Missing Critical Clauses
AI drafts based on common patterns. It doesn’t understand the details of your business operations, your specific risk profile, or the critical commercial objectives you are trying to achieve. Therefore, it lacks the ability to draft the specific clauses you need. We understand the importance of essential or additional clauses to protect intellectual property rights, restraint periods, identification of key persons, licensing rights and many more considerations.
Zero Safety Net
When a lawyer drafts a document for you, they operate under a professional duty of care. We ask questions about your specific business goals and operations and have experience in drafting contracts in a NSW business context. With an AI-drafted contract there is no support, no review and a serious lack of legal insight.
RMB provides support for all business and retail lease agreements, your first step should be to contact our office to arrange a consultation. You can contact us by by phone or our 'Ask a Question' tool on our website.