Industry guide

Legal & professional services

Law firms, accountants, advisers and legal-tech products use AI for research, drafting, review and client-facing advice. The risks are confidentiality, hallucinated citations, unauthorised practice and over-claiming. The FTC's DoNotPay case shows that calling a product a 'robot lawyer' without testing is deceptive advertising; Utah requires licensed professionals to disclose generative AI use up front; the EU AI Act treats AI that assists judicial authorities as high-risk; and professional conduct rules everywhere require competence and supervision of tools.

Regulated uses

AI legal research, drafting and citation generation
Client-facing legal or tax advice chatbots
Document review, e-discovery and contract analysis on confidential data
Case-outcome prediction and litigation risk scoring
Tools used by or for courts and tribunals

Laws by region

Region	Law	Status
EU	EU AI ActEU Artificial Intelligence Act (Regulation (EU) 2024/1689)	In force
EU	EU AI Omnibus 2026Digital Omnibus on AI (Regulation (EU) 2026/1744)	In force
US	Utah AI Policy ActUtah Artificial Intelligence Policy Act (SB 149, as amended by SB 226 and SB 332 in 2025)	In force
US	Texas TRAIGATexas Responsible Artificial Intelligence Governance Act (HB 149)	In force
US	Colorado ADMT ActColorado Automated Decision-Making Technology Act (SB 26-189, replacing SB 24-205)	Upcoming
US	EO 14365 (federal preemption push)Executive Order 14365 — Ensuring a National Policy Framework for Artificial Intelligence	In force
Canada	PIPEDA (Canada)Personal Information Protection and Electronic Documents Act (PIPEDA)	In force
Canada	Quebec Law 25Quebec Law 25 — Act respecting the protection of personal information in the private sector (automated decision provisions)	In force
Canada	Canada GenAI Code of ConductVoluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems	Voluntary
Standards	NIST AI RMFNIST AI Risk Management Framework 1.0 and Generative AI Profile (NIST AI 600-1)	Voluntary
Standards	ISO/IEC 42001ISO/IEC 42001:2023 — Artificial intelligence management system	Voluntary

Obligations checklist

Verify every AI-generated citation and authority before it leaves the firm; several courts have sanctioned lawyers for fake cases.
Disclose generative AI use to clients where professional or state rules require it (Utah: at the start of the interaction).
Never market a tool as equivalent to a lawyer or accountant without documented testing and professional oversight.
Use enterprise tools with no-training and confidentiality terms; do not paste privileged material into consumer chatbots.
Keep a supervising professional responsible for AI-assisted work product.
Run a DPIA/PIA for tools processing client personal data.
Check EU high-risk status for any tool used to assist courts or in legal decisions affecting individuals.

Real cases

Settlement2024 · US-federal
FTC v. DoNotPay — the 'robot lawyer' that was never tested against real lawyers
Proposed consent order announced 25 September 2024; finalised 11 February 2025 after a 5–0 Commission vote. DoNotPay must pay $193,000 in monetary relief, stop claiming its service performs like a real lawyer without evidence, and notify everyone who subscribed between 2021 and 2023 about the settlement.
Ruling2024 · CA-BC
Moffatt v. Air Canada — airline liable for its chatbot's wrong answer
Decision 2024 BCCRT 149 (February 2024). Air Canada was ordered to pay C$812.02 in total: C$650.88 in damages (the fare difference) plus pre-judgment interest and tribunal fees. Small money, but the first widely reported ruling that a company answers for what its customer-facing AI says.

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Sources

Last reviewed Sep 25, 2026.