AI-based Legal Tech Solutions: Discover The Legal Pitfalls

• Published date: 07 March 2023
• Subject Matter: Privacy, Technology, Data Protection, Privacy Protection, New Technology
• Law Firm: Timelex
• Author: Mr Bernd Fiten and Geert Somers

Over the past years, "legal tech" solutions have become increasingly popular to help inhouse legal departments and law firms share and reuse existing knowledge. Thanks to the rapid growth of technology and in particular artificial intelligence, legal tech solutions have been taken to yet another level. They can now also be used to quickly review, search and analyse documents. And thanks to the extensive data input they can even be used to create, harmonise and improve documents. This (r)evolution is saving valuable time for legal professionals and therefore also contributing to higher quality and cost-efficiency. In this blogpost we will examine the potential pitfalls of this new way of working, in particular also due to the involvement of third parties from whom legal tech solutions are procured.

Reuse challenges, pitfalls and practical remedies

When (in-house) lawyers draft legal documents such as contracts, legal opinions and court documents, they usually do not reinvent the wheel. Even when it's best to start from scratch, existing legal documents will often serve as inspiration and some part may be reused.

However, reusing existing (and sometimes quite old) legal documents can pose a number of legal challenges. We distinguish challenges in terms of personal data, confidentiality and context of the legal document:

Personal data

Factual observation

Legal documents may contain a variety of personal data. For contracts, consider e.g. the following personal data: The identification of the parties (in the case of natural persons or sole proprietors), Party representatives (e.g. names), Considerations with more context (e.g. personal reasons for amicable settlement), Contact details and addresses (e.g. place of residence or for deliveries), Notification clauses (e.g. e-mail addresses), Financial data (e.g. wages), Comments in the context of a negotiation (e.g. personal reasons for not accepting a particular clause), Metadata, Etc. In practice, some legal documents contain more personal data than others.

Legal challenge

Having legal documents indexed and content searchable inevitably involves the processing of personal data mentioned in those legal documents, whether or not that is intended. When the legal document contains personal data, the organisation of the in-house lawyer or law firm will act as a data controller of the personal data contained in those legal documents for legal tech purposes. That processing activity consists of analysing the legal document...