Artificial Intelligence Is Good For The Legal Profession

Uploaded on 2023-12-21 in TECHNOLOGY-Key Areas-Artificial Intelligence, FREE TO VIEW, BUSINESS-Services-Law

The European Union (EU) has taken a leading role as the first global legislator to introduce an AI law, setting a precedent similar to the impact of the General Data Protection Regulation (GDPR) on data privacy around the world.

The EU initiative aims to establish global standards for AI regulation, promoting the European approach to tech regulation on the world stage. The goal is clear: to pave the way for a global AI landscape that is ethical, safe, and trustworthy.

Now, lawyers are saying the landmark AI legislation agreed upon by EU officials will generate extensive work for the major firms, with multi- jurisdictional law firms that have strong regulatory practices best positioned to ride the wave of advisory and compliance work the new bill is expected to create.

The first comprehensive AI rulebook in the world, the Artificial Intelligence Act is expected to touch many large companies in the EU, applying not only to companies that develop AI software, but any company that uses AI systems.

Companies that break the new rules could face fines as high as 7% of their global turnover, lower than the bloc’s much-feared 10% antitrust fines, but higher than its 4% GDPR privacy fines. While the new law, first proposed by the European Commission in April of 2021, will apply to all AI models developed or used by companies in the EU, the bill introduces a separate, tougher set of rules for “high-risk” AI systems deemed especially sensitive due to their potential harm to health, safety, fundamental rights, environment, democracy or the rule of law.

“This is one of the first areas that clients are asking about, does this strict restriction for high-risk AI systems apply to our businesses or products?” Elisabeth Kohoutek, counsel at King & Spalding’s Frankfurt office, told Law.com. “It’s law firms that are already advising or have a strong practice in advising on regulatory laws, how to implement them and how to help clients in getting compliant,” she said.

The consensus in the profession is that law firms with robust regulatory practices as the ones best positioned to advise on the new regulation.

Also, having an international presence outside the EU will likely prove an advantage as organisations deploying AI will not only be deploying in the EU but around the world. Having experts in different regions and jurisdictions will be a positive factor.

The next step in the legislative process is for the final version of the bill to be adopted by both the European Parliament and the Council of the European Union, which is expected to happen in early 2024. The new directive will enter into force two years after that, although some rules will already apply six months after adoption.

Individual EU citizens will be able to launch complaints about the use of AI systems that affect them and under the new rules penalties for non-compliance will be applied in the form of financial penalties.

These will be calculated in the same way as under the European General Data Protection Regulation, as a percentage of the liable party's global annual turnover in the previous financial year, or a fixed sum, whichever is higher. Proportionate caps will be in place when issuing administrative fines against small and medium enterprises and start-ups.

EU Parliament: EUAS: Law.com: Euarctiv: Thomson Reuters: Mayer Brown:

Image: Kraken

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