By: Practical Guidance
Corporate investment in generative artificial intelligence (Gen AI) technologies continues to accelerate. Average Gen AI budgets grew by 30% in 2024 and they are expected to grow at roughly 60% over the next three years, soaring to 7.6% of total IT budgets by 2027, according to a report from Boston Consulting Group.
These investments are leading directly to rapid adoption of Gen AI tools in the workplace. A recent Gallup study of HR executives found that 93% of Fortune 500 companies have begun using AI tools and technologies to improve business practices and nearly half (45%) of them say their organization’s operational efficiency has already improved because of AI.
There is one potential problem looming amid this exciting tech-driven trend: too often the legal team is not in the loop.
Law360 reported that human resources departments are using AI “while about half of their legal chiefs don’t even know about it,” noting that “these discrepancies among executives pose challenges for effective AI risk management.”
8 Tips for Creating a Comprehensive AI Policy
Legal experts caution that the decision to implement AI in the workplace should be a deliberate and careful one. The risks are too great to rush into adoption of any AI-powered technology simply because competitors are using it or customers are asking about it.
“While use of Gen AI can make it easier to enhance productivity and streamline processes, adopting and implementing such technologies can simultaneously add significant complexity to an organization’s operations, sales, manufacturing and human capital management operations,” wrote Eric Felsberg and Douglas Klein, principals at Jackson Lewis P.C., in a recent LexisNexis Practical Guidance practice note. “And with the emergence of Gen AI, many jurisdictions have issued regulations to guard against its misuse. Consequently, it is important that employers seek legal, ethical and regulatory guidance when implementing AI platforms in the workplace.”
The authors suggest that employers work with their legal team to create a comprehensive AI usage policy that sets the ground rules for the deployment of AI tools in their organizations. Here are eight specific tips to consider:
Define AI
Clearly delineate exactly what is being addressed by the policy — and avoid overly technical language — so that users have a clear understanding of which specific AI tools are being covered.
Approved AI Platforms and Use
Establish an approved list of AI platforms in order to mitigate the risk of employees leveraging any AI platform they come across to complete work tasks, then create a vehicle through which employees may request the review, vetting and approval of new tools in the future.
Importance of Confidentiality and Data Security
Include a prohibition against entering any confidential information into any AI platform unless that use is expressly authorized. To avoid the inadvertent disclosure of sensitive information, implement data security measures, including data encryption, access controls and data retention policies.
Ensuring Accuracy before Relying on AI Output
Require users to independently verify the output of the AI platform before relying on the content. In addition to the potential embarrassment and liability that could result from using “hallucinated” AI-generated output, there may be violation of applicable laws and ethical rules for certain industries … such as those for lawyers.
Intellectual Property Rights
The policy must alert users not to use Gen AI to produce content that may violate intellectual property (IP) rights that may belong to the employer, clients or other third parties. Employees need to understand that Gen AI should be utilized as an “idea generator” and must alert others that it was used to generate work product.
Monitoring for Bias
Employers should ensure that their policy outlines how any AI tools are used when helping make employment decisions about applicants for hire, as well as employees eligible for promotion or facing termination. They should then monitor any tool used for employee selection decisions for evidence of bias built into them.
Governance
Establish an internal function dedicated to reviewing, evaluating and approving AI tools; another function that monitors developing laws and regulations to assess their potential impact; and a third function that fields internal questions, requests to use additional AI platforms and reports of violations of the AI usage policy.
Monitoring and Periodic Updates as AI Continues to Evolve
As technologies continue to evolve and regulations emerge, the AI usage policy should contain a provision advising AI users that the policy is subject to frequent update. Users must be directed to consult the policy each time that they embark on an AI-related project.
Resources from LexisNexis Practical Guidance
The LexisNexis Practical Guidance team has published a Generative Artificial Intelligence Resource Kit, a comprehensive collection of information resources that examine the key legal issues related to the adoption and use of Gen AI technologies. Specific content includes:
A training presentation with guidance on how AI is impacting employment law and the workplace;
A practice note that provides an overview of key legal issues;
A template that can be used to create a workplace policy governing the use of AI-driven tools in the workplace; and
A tracker that provides weekly updates on federal legislation pertaining to the deployment of Gen AI technologies.
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