AI tools are becoming a regular part of legal practice in Australia. But with that comes a set of ethical questions that every Australian lawyer needs to think carefully about.

The Australian legal profession is regulated by conduct rules that require competence, confidentiality, candour, and supervision. These obligations do not change when a lawyer uses AI. What changes is the nature of the risks — and the steps lawyers need to take to manage them.

The Regulatory Framework

Australian lawyers are regulated by the Australian Solicitors' Conduct Rules (ASCR) and equivalent rules in each jurisdiction. Barristers are regulated by separate conduct rules. These rules set out the professional obligations that apply to all aspects of legal practice, including the use of AI tools.

The Law Council of Australia and state and territory law societies have published guidance on the use of AI in legal practice. This guidance does not create new obligations — it explains how existing obligations apply in the context of AI.

Competence

Rule 4 of the ASCR requires lawyers to act with competence and diligence. In the context of AI, this means:

You must understand the tools you use. Using an AI tool without understanding its capabilities and limitations is not consistent with competent practice. Before using an AI tool in your practice, you should understand what it does, how it works, and where it is likely to produce errors.

You must verify AI outputs. AI tools can produce plausible-sounding but incorrect outputs, including hallucinated case citations, misstatements of legislative provisions, and incorrect legal analysis. Every AI output that you rely on or provide to a client must be verified against primary sources.

You must stay current. AI technology is developing rapidly. Lawyers have an obligation to stay current with developments that affect their practice, including developments in AI tools and the guidance issued by professional bodies.

Confidentiality

Rule 9 of the ASCR requires lawyers to preserve the confidentiality of client information. In the context of AI, this raises important questions about what happens to client information when it is entered into an AI tool.

Review data handling policies. Before entering client information into any AI tool, review the tool's privacy policy and terms of service. Understand where data is stored, how it is used, and whether it may be used to train the AI model.

General-purpose AI tools. Many general-purpose AI tools, including free versions of ChatGPT, may use inputs to train their models. Entering confidential client information into these tools may breach your confidentiality obligations.

Purpose-built legal AI tools. Purpose-built legal AI tools such as Harvey and Luminance are designed with law firm data security requirements in mind. They typically offer enterprise agreements that include data handling commitments appropriate for legal practice.

Anonymisation. Where you need to use a general-purpose AI tool and cannot use a purpose-built legal tool, consider whether you can anonymise the information before entering it.

Candour

Lawyers owe a duty of candour to the court. This means you must not mislead the court, including by relying on incorrect legal authorities.

Verify citations. AI tools can hallucinate case citations — producing references to cases that do not exist or misattributing holdings to real cases. If you rely on an AI-generated citation without verifying it and the citation is incorrect, you may breach your duty of candour.

Verify legal propositions. AI tools can also misstate the law. Before relying on an AI-generated statement of legal principle in a submission or advice, verify it against the primary source.

Supervision

Lawyers have an obligation to supervise the work of those they are responsible for. In the context of AI, this means:

AI outputs must be supervised. You cannot delegate your professional responsibilities to an AI system. AI outputs must be reviewed and verified by a qualified lawyer before being used in practice.

Junior lawyers using AI. If junior lawyers in your firm are using AI tools, ensure they understand the limitations of those tools and the review process required. The supervising lawyer remains responsible for the quality of the work.

Billing

The use of AI tools raises questions about billing. If an AI tool significantly reduces the time taken to complete a task, consider whether your billing reflects the value delivered to the client rather than the time spent.

Some professional bodies are developing guidance on billing in the context of AI. In the meantime, transparency with clients about the use of AI tools and the basis for your fees is good practice.

Disclosure to Clients

There is no current requirement under the ASCR to disclose to clients that you have used AI tools in their matter. However, transparency is generally good practice, and some clients — particularly sophisticated commercial clients — may ask about your use of AI.

Consider whether your engagement letters should address the use of AI tools, including any limitations on the use of client information in AI systems.

Staying Current

The regulatory environment around AI in legal practice is evolving. The Law Council of Australia, state and territory law societies, and the courts are all developing guidance and, in some cases, rules around the use of AI.

Lawyers should monitor guidance from their professional body and the courts in their jurisdiction, and update their practices as the regulatory environment develops.