Numerous businesses have embraced generative AI technology to enhance their operational efficiency, boost productivity and foster innovative ideas.

However, it is important to be aware of the potential legal and financial consequences associated with the use of ChatGPT and similar AI systems. We spoke to Sujay Rao, CPO at Sirion to find out more.

BN: How has generative AI’s rapid adoption impacted businesses, and what specific advantages have companies gained from incorporating AI technology like ChatGPT into their operations?

SR: Generative AI’s rapid adoption has transformed business operations and enhanced capabilities. According to a recent study, around 72 percent of enterprises plan to use generative AI to improve employee productivity. Integrating generative AI technology like ChatGPT offers distinct benefits that support these efforts, especially in areas like contract management.

For example, AI expedites contract generation through standardized templates and first draft generation. It also uses natural language processing (NLP) to identify risks, problematic clauses, and anomalies within contracts, so that businesses can resolve issues prior to document dissemination without rounds of revisions and reviews.
AI also plays a pivotal role in maintaining contractual compliance. This looks like anything from automating reminders for contract expiration and renewal dates to monitoring the status of each party’s contractual obligations. All of these things ultimately free employees from administrative tasks, enabling them to focus on high-value strategic activities and enhancing overall organizational efficiency.

BN: What are some proactive strategies that businesses can implement to manage how generative AI is used within the workplace and minimize potential risks?

SR: Integrating generative AI into the workplace presents a unique set of opportunities and challenges for businesses. To effectively manage it and mitigate potential risks, you can implement several proactive strategies.

First and foremost, establish clear guidelines and ethical frameworks for the use of generative AI within your organization. Companies should outline exactly how they intend to apply generative AI to their service or product, including ethical guidelines and data privacy policies. Promoting collaboration among internal AI experts, legal teams and relevant stakeholders also ensures that everyone has a well-rounded understanding of the AI implementation and aligns with the terms of usage.

It’s also paramount that businesses stay updated on the evolving AI regulatory requirements. As AI technologies and ethical considerations develop, staying informed about industry best practices and complying with relevant regulations ensures that the business stays aligned with responsible AI utilization.

BN: When employees utilize generative AI for various tasks, what are the potential risks?

SR: The three biggest risks with generative AI in a workplace are data security, protecting intellectual property, and mitigating unintended biases. Implementing AI involves the exchange and processing of sensitive data. This collecting, storing and transferring of data across platform makes it susceptible to breaches, endangering the confidentiality and privacy of both personal and organizational information.

Now with generative AI, we’re looking at possible intellectual property challenges — content that could infringe upon existing copyrights, patents or trademarks, raising legal issues and disputes over ownership and usage rights. When it comes to unintended biases, generative AI models can inadvertently perpetuate existing biases present in the training data, resulting in biased outputs that may reinforce stereotypes or discriminate against certain groups. This hampers the quality of the generated content and poses ethical concerns.

BN: What role does education and training play in minimizing the risks associated with the use of AI technologies within an organization? How can businesses ensure that their employees are well-informed about the proper use, limitations and potential pitfalls of generative AI?

SR: Education and training play a pivotal role in mitigating the risks associated with the deployment of AI technologies within an organization. Providing a deep understanding of AI’s capabilities, limitations and potential pitfalls empowers employees to make informed decisions while using generative AI tools. This could involve conducting regular workshops, webinars and seminars led by AI experts who can explain the nuances of AI technology. Creating accessible and up-to-date resources, such as guidelines and best practices, can also aid employees in understanding how to leverage AI effectively and ethically.

BN: How else can organizations prevent the potential legal and financial consequences of generative AI?

SR: Recently, New York lawyers were fined $5,000 for using ChatGPT to cite misleading statements in court. This incident underscores the importance of maintaining accurate and reliable information in AI-generated content. Therefore, to prevent possible legal and financial consequences of generative AI, organizations must consider extra measures beyond just technology safeguards.

It’s crucial to balance the capabilities of AI with human expertise and oversight. By doing so, organizations can establish a comprehensive framework that leverages AI’s efficiency and ensures responsible decision-making and content generation. Human oversight plays a pivotal role in monitoring AI-generated outputs and identifying bias, misinformation or inappropriate content.

Moreover, due to the inherent risk of spreading misinformation through internet-based data, involving human experts becomes essential. They provide a nuanced understanding of legal and ethical considerations, enabling proactive adjustments to AI algorithms in alignment with regulatory guidelines and industry standards.

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