Experts warn that responsible data management must keep pace in the AI era
As artificial intelligence tools become increasingly integrated into law firms’ day-to-day operations, data management has entered a new era filled with promise and risk.
For a profession steeped in confidentiality and built on trust, the arrival of AI presents a challenge: how to innovate without compromising core ethical and legal obligations. Experts agree that the answer is adoption with eyes wide open.
Lawyers and legal tech leaders say that the right approach to data management is not to abandon AI but to build smarter systems and frameworks to manage the data it relies on.
Before the widespread adoption of AI, data governance in law firms centred around two primary considerations: lawyer-client confidentiality and the security policies imposed by clients – especially large institutional ones like banks.
Colin Lachance
Colin Lachance, principal at PGYA Consulting, says AI complicates things by adding another variable.
That variable is AI-backed software vendors that can gain access to this data. As a client, that means that you must trust your lawyer’s data management and the process of their AI service providers. Earning trust is not as challenging for service providers with established names within the Canadian legal landscape as it is for global names.
“AI introduces a potential leakage,” Lachance says, adding that AI tools themselves may be embedded in larger systems that neither lawyers nor clients control.
Therefore, you need to trust the lawyer, their software vendor, and the vendors’ service providers and how they manage your data.
“If you have someone who says, ‘I have AI that can do all these amazing things for your firm, and don’t worry, OpenAI says they won’t train on your data,’ that alone isn’t sufficient,” Lachance says.
He adds that this complexity is causing many firms to play it safe by limiting the kind of data they input into AI tools, even when the tools are technically secure.
Law firms are wary for a good reason: the obligations to protect client data haven’t changed, even if the tools have.
One way to overcome these issues could be storing data on private cloud servers. Before broader digitalization, where firms mostly moved their files to the cloud, they used to keep their files on the premises. Private cloud computing means using the technology to move the data back in-house without the boxes and binders.
The data is still in the cloud, and you are still using resources of technology behemoths like AWS, Google, or Microsoft, but the data is stored on a private network that doesn’t interact with the open internet.
As Mark Doble, CEO of legal tech company Alexi, puts it, the big technology companies “power the data centres and hire the security guards.” This is why more and more firms trust this solution regarding data storage rather than storing data on multi-tenant cloud providers accessible on the open internet.
“There is definitely a trend towards localization of these systems… I think that’s very clearly where we’re headed. It allows us to maximize security without limiting capability.”
Despite the concerns, using AI in law firms’ data management could be worth the trouble – particularly when making sense of vast volumes of information.
Joshua Lenon
Law firms handle an increasing volume of data per matter, such as emails, chat logs, or social media. Joshua Lenon, Clio’s lawyer-in-residence, says AI helps turn that firehose of data into something classifiable and usable.
He says the caveat is that we should not try to replace existing good practices in data handling but build on them with new tools.
Instead of relying on perfect tags or naming conventions (from the past), you can now ask natural language questions, Lenon says. “It opens up far wider use cases for law firm data than we had before.”
However, over-reliance on AI is a real threat that shouldn’t be ignored.
If law firms assume AI will handle all metadata correctly without previously established data management practices, they risk losing critical information.
“It has to be a combination of the two. You still need solid data practices – it’s just that you’re no longer limited only to them,” Lenon says.
The consensus among experts is clear: AI isn’t going anywhere. It’s likely to play a growing role in everything from document management to legal research to client communications.
That’s why law firms shouldn’t shy away from AI but must adopt it thoughtfully.
That means conducting due diligence on AI vendors regularly. They also need to use platforms that provide strong privacy controls and customizable permissions. Moreover, AI innovation needs to be paired with existing data best practices and not viewed as a replacement.
For law firms, the path forward lies in embracing AI with eyes wide open – balancing innovation with the same commitment to data integrity and client trust.
