Clause & Effect: Indemnity, Liability, and Ethics in the Age of Generative AI

Thank you to everyone who joined our recent CLE “Clause & Effect: Indemnity, Liability, and Ethics in the Age of Generative AI.”  The session explored how generative AI is transforming business operations and the new challenges this creates for contract drafting, negotiation and professional responsibility.

Key Themes and Insights: Navigating Legal Risk in the Age of AI

1. Rethinking Indemnity and Liability in AI Deals
   Allocating AI related risk requires reexamining traditional contract terms. Topic discussed included:

• • IP protection for training data, models, and outputs
  • Managing client data used to train or fine-tune AI systems
  • Addressing privacy, data protection, and bias related claims
  • Defining AI losses and setting appropriate liability caps

2. Ethical Responsibilities in AI Adoption
   Lawyers must balance innovation with professional duties. Core ethical considerations include:

• • Maintaining accuracy through human review of AI outputs
  • Preserving client confidentiality and privilege
  • Understanding vendor security and data handling
  • Implementing internal governance and oversight of AI use across business teams

3. Practical Takeaways
   Participants worked through hypotheticals applying these concepts to real world scenarios. The discussion emphasized that proactive contracting and ethical oversight are essential to managing AI risk effectively.

Looking Ahead

As AI capabilities evolve, so do the associated legal exposures. Our team continues to advise clients on drafting AI related provisions, evaluating vendor terms, and aligning AI governance with emerging regulatory and ethical standards.

If you’d like to discuss how these developments may affect your organization’s contracts or compliance programs, please feel free to reach out to Patrick Law Group.

• Elizabeth (Lizz) Patrick – lpatrick@patricklawgroup.com
• Linda Henry – lhenry@patricklawgroup.com
• Alexa Baltodano – abaltodano@patricklawgroup.com
• Marshall Barton – mbarton@patricklawgroup.com
• Meredith Sidewater – msidewater@patricklawgroup.com
• Jennifer Thompson – jthompson@patricklawgroup.com

If you’d like to discuss how these developments may affect your organization’s contracts or compliance programs, please reach out to Patrick Law Group. Or if you’d like to be added to our distribution list for future CLEs and AI-related legal updates, please contact Vesatee Merkerson vmerkerson@patricklawgroup.com.