Navigating Ethical Waters: AI in Bankruptcy Practice
As artificial intelligence (AI) continues to reshape the landscape of legal practice, it brings with it a host of ethical considerations that practitioners must grapple with. Joe Tiano, Jr. Chief Executive Officer at Legal Decoder, Inc., and Nancy Rapoport, UNLV Distinguished Professor and Garman Turner Gordon Professor of Law at the University of Nevada, Las Vegas (UNLV), William S. Boyd School of Law talked about the key ethical considerations surrounding the use of AI in bankruptcy law, emphasizing two pivotal aspects: Legal Ethics and Business Ethics.
Legal Ethics
In the realm of legal ethics, Tiano and Rapoport highlight the crucial duties lawyers must uphold when utilizing AI tools. These include ensuring competent representation, acting with diligence, and supervising both lawyers and non-lawyers involved in AI processes. The infamous Mata v. Avianca case serves as a good lesson, stressing the importance of understanding AI's capabilities and limitations to prevent errors and ethical breaches.
Courts are now actively addressing the competency challenges posed by AI. Judges, such as Brantley Starr and Michael Baylson, have issued orders emphasizing the limitations of AI in legal briefing, urging practitioners to proceed with caution due to AI's propensity for hallucinations and biases.
Business Ethics
Beyond legal ethics, the use of AI in bankruptcy practice introduces a layer of business ethics concerns. The quality of AI systems heavily relies on the data used to train them, making the potential for bias a significant issue. Transparency in AI operations is also a challenge, the unknowns of many AI systems create concern about the accuracy and reliability of their outputs.
Tiano and Rapoport argue job elimination due to AI is a threat, particularly for younger associates. They stress the need to provide them with the training needed to work in an AI-driven industry.
AI in Bankruptcy
The article further explores the specific implications of AI in bankruptcy practice. The authors propose bankruptcy courts should consider the use of AI tools when evaluating the reasonableness of attorneys' fees under section 330 of the Bankruptcy Code. This involves recognizing the efficiencies AI can deliver and encouraging its use, particularly in large-scale document review and drafting.
Ethical Considerations
While the authors do not find it unethical for bankruptcy practitioners to use AI, they emphasize the importance of responsible AI usage. Disclosures to clients and the court regarding AI utilization are recommended best practices, with transparency likely becoming a standard expectation as AI integration becomes more prevalent.
For the full report go to Reuters (registration required).