Can AI replace your lawyer? Pier Law
Are you using AI to write legal contracts for your business? Be aware of the risks.
Artificial intelligence (AI) is transforming the legal sector, enabling rapid drafting of contracts, letters, and policies. “While this offers cost and time savings, it introduces significant risks around accuracy, judgment, confidentiality, and accountability,” says Christopher Connell, associate of Pier Law.
AI systems can produce convincing but incorrect content, a problem known as ‘hallucination,’ says Christopher. “We are seeing errors from AI that include misinterpreted laws, fabricated cases, or ineffective clauses.”
Even minor mistakes can lead to disputes, regulatory breaches, or contracts that fail to allocate risk properly. “In practice, AI-generated agreements are often overly simplistic, omitting essential terms and protections.”
Other common issues are lack of context and the risk associated with inputting sensitive information into AI tools.
“Legal drafting also requires context, which is something AI lacks. Without understanding a client’s specific circumstances, objectives, or jurisdiction, outputs may be too generic or misaligned. Subtle wording differences can significantly affect legal outcomes.”
Confidentiality is another concern, as sensitive information entered into AI tools may be stored or exposed. Meanwhile, users typically bear responsibility for errors, with limited recourse if issues arise.
Despite these risks, AI can be useful as a starting point, says Christopher. “But it needs careful human review and professional oversight. AI can support efficiency, but it cannot replace legal expertise.” To read the full story on this subject, see the Pier Law website.
To discuss your legal needs, contact the Pier Law team on 03 366 5540 or email info@pierlaw.co.nz.
