The EU AI Act: 7 Questions To Ask Legal Tech Vendors Today
As the EU AI Act comes into effect, it is crucial for General Counsels and Chief Legal Officers to understand the implications it holds for their organizations. The act introduces significant penalties and places AI vendors under close scrutiny, creating multifaceted risks, including lost business opportunities and damage to reputation. Legal leaders are urged to proactively assess vendor compliance and ensure their organizations are not exposed to regulatory risks.
Understanding AI Risk Categories
The EU AI Act categorizes AI systems into three distinct risk buckets:
- Prohibited AI Practices: These include techniques such as subliminal manipulation and real-time facial recognition.
- High-risk AI: This category covers systems that significantly impact individual rights, such as recruitment AI and judicial decision-support tools, which come with stringent documentation and monitoring requirements.
- Limited-risk AI: This includes most legal tech applications, such as contract drafting assistants and client chatbots, which have lighter obligations primarily focused on transparency.
Vendors must be able to clearly classify their AI features within these categories to demonstrate not only compliance but also competence.
Document-Centric vs. People-Centric AI
When evaluating AI solutions, it is essential to discern whether they are built around documents or people. Document-centric AI tools, such as contract review assistants, enhance workflows without replacing human judgment. In contrast, people-centric AI predictions pose regulatory risks. Vendors should prioritize document-centered functionalities to ensure compliance and minimize exposure to scrutiny.
Governance Processes
Effective governance processes are non-negotiable under the EU AI Act. Vendors must implement:
- Bias Testing
- Lifecycle Risk Management
- Incident Reporting
Legal leaders should request a comprehensive trust/compliance packet that includes:
- Risk classification by feature
- Training data summaries
- Monitoring and bias testing frameworks
- Incident response protocols
Transparency Requirements
Transparency is not optional; it is a legal requirement. Vendors must ensure that users are informed when interacting with AI through:
- Clickwraps for consent confirmation
- In-app banners indicating AI involvement
- Audit trails documenting AI interactions with documents
Establishing trust through transparency is critical for user buy-in and compliance.
The Human Element in AI
Maintaining a human-in-the-loop approach is essential for compliance with the EU AI Act. Vendors should design AI systems that support, rather than replace, human oversight. Effective implementations include:
- Contract Lifecycle Management (CLM) platforms that flag deviations without executing approvals
- Document drafting tools that highlight risks without rewriting documents
- Workflow automations requiring lawyer approval prior to execution
Incident Response Plans
AI systems are not infallible, and vendors should have robust incident response plans in place. Legal leaders should seek clarity on:
- Methods for detecting AI malfunctions
- Internal protocols for handling incidents
- Notification processes for clients
A vague response is unacceptable; structured incident management is necessary to meet regulatory expectations.
Vendor Compliance Timeline
While it may seem that there is ample time to comply with the EU AI Act, procurement cycles do not wait. Forward-thinking vendors are already treating compliance as a sales advantage. They arrive prepared with answers rather than excuses, positioning themselves as trustworthy partners.
Conclusion
The EU AI Act presents both challenges and opportunities for legal leaders. By demanding vendor compliance now, organizations can mitigate risks while establishing themselves as leaders in responsible AI adoption. This proactive approach not only safeguards against regulatory pitfalls but also fosters growth and innovation within the legal technology landscape.
