This article is for informational purposes only and does not constitute legal advice. You should consult with a qualified professional before making any decisions about the use of AI in your law firm.
How Can I Identify and Manage Shadow AI in My Legal Practice?
A law firm should find out which AI tools staff use for client work, what data enters them and which accounts and settings apply. Use that inventory to set an approved route and review sensitive uses before relying on a blanket tool label.
Check what happens to client material before staff use a grammar checker or AI summarisation tool. Record the account, data handling and review arrangements, and refer any confidentiality concern to the firm's responsible adviser.
Why is Unauthorised AI Use So Prevalent?
Ask staff which tasks they are trying to complete and why they chose an unapproved tool. Deadline pressure may explain a shortcut, but the firm still needs to review the information shared and the purpose of the use.
Review the terms and settings of the specific account. A free or paid label does not establish how prompts, uploads or outputs are handled.
The Risks of Unmanaged AI Use
The table identifies areas to investigate. Its confidentiality and regulatory statements need case-specific advice; a tool's public status alone does not establish that a particular use breaches a duty.
| Risk |
Description |
| Confidentiality Breaches |
If client material has entered an unapproved public tool, preserve the incident details and ask the responsible professional and privacy reviewers to assess the exact terms, data and exposure. Do not infer a confidentiality breach from the product category alone. |
| Data Security |
Public AI tools are a prime target for cybercriminals. A data breach at one of these providers could expose your clients' most sensitive information. |
| Inaccurate Information |
As we have seen time and time again, AI can and does produce inaccurate and even fabricated information. If your lawyers are relying on this information without verification, you are exposed to professional negligence claims. |
| Regulatory Action |
The SRA, the ICO, and other regulators are taking a keen interest in the use of AI. A significant incident involving unapproved AI could lead to fines, sanctions, and reputational damage. |
| Loss of Control |
If you do not know what AI tools are being used in your firm, you have no control over the data, the outputs, or the risks. You are flying blind. |
A Practical Guide to Managing Unauthorised AI
Use discovery, risk assessment, an approved route and staff training to review unapproved AI use:
1. Discover: See the Unseen
Start by finding which tools and accounts are used for work:
- Technical Discovery: Using network monitoring and endpoint detection tools to identify traffic to known AI services.
- Human Discovery: Ask staff which tools they use and for which tasks. Explain how responses will be handled so they can report concerns.
2. Assess: Triage the Risk
Once you have a list of the AI tools being used, you need to assess the risk of each one. Create a simple risk matrix:
- High-Risk: Uses where the firm cannot establish appropriate handling of client data. Pause the affected use while its terms, settings and obligations are reviewed.
- Medium-Risk: Uses with some controls but unresolved account ownership, approval or supervision. Record the gap and who will assess it.
- Low-Risk: Uses approved for a defined task and data type, with the required review in place. Keep that approval under review when the use changes.
3. Govern: Provide a Safe Alternative
Give staff an approved route for the tasks they need to complete. Check whether it is usable and whether its data rules and review steps are understood.
The AI Acceptable Use Policy should name the approved tools, permitted tasks and data restrictions, with a route for requesting a new use.
4. Educate: Build a Culture of Awareness
Use staff training to explain:
- The firm's AI policy.
- The risks of using unauthorised AI tools.
- How to use the firm-sanctioned AI tools safely and effectively.
The Bottom Line: Unauthorised AI is a Symptom, Not the Disease
Review whether unapproved use reflects a task the approved tools do not support, unclear rules or a slow approval process.
Use staff feedback to decide which tasks need an approved tool and where training or support is missing.
Assign someone to review the tool inventory and follow up on unresolved data-handling or supervision concerns.
Take the Next Step
If you are ready to move from theory to action, I can help. My AI Audit gives you a comprehensive assessment of your firm's AI readiness, identifying the gaps in your governance, the risks in your current tooling, and a clear roadmap to get you where you need to be.
Book a Discovery Call → or learn more about the AI Audit.
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For AI-generated case references, verify each authority against the original source and record who checked it before relying on the work.
