How are Law Firms advising on AI?

🤖 Today I'll cover the key things law firms are advising clients on Artificial Intelligence (AI), and how to discuss these to stand out in applications and interviews.

I will cover AI in the scope of regulation, litigation and IP, data protection and M&A.

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A bit of background

Just before we dive head straight into the messy, fast-paced (and some would say terrifying) world of AI, I wanted to give you a whistle-stop tour of what is set to become the must-know legislation for this industry: the EU AI Act (AI Act).

You might have heard of the AI Act. It's a 200-page monster that sets out the first official rules on governing AI systems. For us tech lawyers like me, it's more exciting than the Dune sequel.

It's expected to come into force next month and become applicable by the Q2 of 2026. Below I have summarised the main bits you need to know:

• Risk-Based Framework: The AI Act categorises AI systems based on risk levels—unacceptable, high-risk, and limited-risk—with specific regulations for each category. Unacceptable-risk AI, which contravenes EU values, is prohibited, whilst high-risk AI must comply with mandatory requirements and undergo assessments.
• Scope: The Act applies to AI system providers and users within the EU, as well as those outside the EU if their systems' output is utilised within the Union. It excludes AI used solely for scientific R&D and non-professional personal activities.
• Transparency and Fundamental Rights: High-risk AI systems must undergo a fundamental rights impact assessment before market entry. The Act mandates transparency about the automated nature of AI in certain contexts, such as human interaction or content generation, to ensure informed user decisions.
• Innovation and Governance: The AI Act promotes innovation through AI Regulatory sandboxes, allowing for real-world testing under specific conditions. It establishes a governance structure with an AI Office, AI Board, and a scientific panel for oversight and enforcement.
• Penalties: Violations of the AI Act carry significant fines, proportionate to the severity of the breach and the company's global annual turnover. The Act includes provisions for monitoring, reporting, and compliance, with a phased implementation timeline leading up to full applicability in 2026.

Now that we have that 200-page brick behind us, let's talk about the key areas law firms will be advising on, starting with Regulation.

Regulation

One of the biggest problems law firm clients are facing right now is that it's not clear what they need to do.