AI Governance for Legal Firms in the UK

Like so many industries, the work inside law firms is changing. Research that kept paralegals busy for half a day could now be returned in minutes. First-draft contracts, disclosure reviews, client correspondence, document summaries – these are all tasks which AI tools can assist with, if a firm decides that’s right for their business.   

The shift is happening quickly, and, in many firms, it is outrunning the governance needed to manage it. The question most firms haven’t answered yet is: who is responsible for how AI is being used within the company? The gap between adoption and oversight is where the risk lives.   

This guide covers the specific risks, what the Solicitors Regulation Authority (SRA) and courts now expect, and what a good governance strategy looks like. 

In a survey of over 700 lawyers, LexisNexis, reported by Artificial Lawyer, found: 

• 61% of UK lawyers now use generative AI at work. 
• 51% of those use purpose-built legal AI tools such as Lexis+ AI. 
• 49% rely solely on general-purpose systems like ChatGPT or other large language models. 
• 56% reinvest the saved time into billable work. 
• 53% say it has improved work-life balance. 

That’s a lot of good news for the industry, as it highlights the potential of embracing AI within the workplace. But there is another side to the coin: 

• 77% of lawyers remain concerned about AI producing inaccurate outputs. 
• Only 17% say AI is embedded in their firm’s strategy and operations. 

That gap – widespread individual use with minimal institutional oversight – risks becoming a defining characteristic of AI adoption in UK legal firms. Tools are being used daily, but policies, in many cases, either don’t exist or aren’t being followed. 

The numbers tell a clear story. AI is embedded in day-to-day legal work, but, in many firms, its use isn’t documented or controlled. Such governance gaps in legal practices have consequences. Each of the following risks has generated UK case law, regulatory guidance, or professional indemnity implications: 

Hallucinations  

AI tools can produce citations to cases that do not exist, stated with complete assurance. As Gareth Parker, Head of Operational Compliance, explained on our recent AI governance webinar: “AI can be confidently wrong.” 

By the end of 2025, the UK had recorded 24 confirmed hallucination incidents in courts and tribunals; internationally, the number exceeded 600, according to Natural and Artificial Intelligence in Law.  

As just one example, in Choksi v IPS Law LLP, a witness statement from a managing partner of a solicitor’s firm contained fabricated cases produced with the assistance of AI. The references had been used without any verification system in place.  

Confidentiality and legal privilege 

Uploading any client documents to an open-source AI tool may constitute a breach of client confidentiality and a waiver of legal privilege.  

This risk was addressed directly in UK v Secretary of State for the Home Department (AI hallucinations; supervision; Hamid) [2026] UKUT 81 (IAC). According to sources, the judgement drew a clear distinction between open-source tools (which place information in the public domain) and closed enterprise tools with appropriate data safeguards:  

“Uploading confidential documents into an open-source AI tool, such as ChatGPT, is to place this information on the internet in the public domain, and thus to breach client confidentiality and waive legal privilege. 
 
Closed-source AI tools which do not place information in the public domain, such as Microsoft Copilot, are available for tasks such as summarising without these risks.” 

Many staff members are making tool choices without understanding these implications, but it is clear that the distinction matters. 

Supervision gaps and partner-level liability 

Courts and regulators are increasingly treating AI misuse as a systems failure, not a personal one.  

In Ndaryiyumvire v Birmingham City University, two fake AI-generated cases appeared in an application. The court regarded this a failure of management at the firm rather than the named solicitor’s individual conduct, according to reports.  

If staff are using AI tools without a supervision framework in place, the risk sits with the organisation – regardless of who did the work. 

Data protection and automated decision-making 

The Data (Use and Access) Act 2025, in force from February 2026, amended the UK GDPR’s approach to automated decisions. Under the old rules, using AI to make decisions that legally or significantly affected individuals was largely prohibited unless specific conditions were met.  

The new rules are more permissive, but they come with mandatory safeguards. If AI is making or significantly contributing to a decision that affects a client, firms must tell the client that automated processing was involved and they are able to both challenge it and request a human review.  

The risk for law firms isn’t that AI can’t be used in client-facing work. Rather, if AI is being used without a documented process showing safeguards are in place, legal firms could be potentially in breach without realising it. 

The Solicitors Regulation Authority (SRA) has not written AI-specific regulations, but it has produced specific guidelines which restate how existing Standards and Regulations apply to AI. SRA’s compliance tips for solicitors regarding the use of AI and technology (which gets routinely updated) set out what the regulator expects firms to have in place, advising legal firms to:  

“Make sure your governance frameworks remain fit-for-purpose and underpin the responsible adoption, use and monitoring of AI.” 

They continue to explain that good governance will include: 

• Appropriate leadership and oversight 
• Undertaking risk and impact assessments 
• Creating policies and procedures 
• Undertaking training and awareness 
• Monitoring and evaluating the impact of the technology to avoid unintended consequences 

In practice, that means the question “are our people using AI responsibly?” needs a documented answer, not an assumption. 

In one of the most significant developments yet for the legal profession, the UKJT released a statement adding further consideration to the use of AI within law firms. 

The statement concluded that lawyers could, in some circumstances, be negligent because they failed to use AI when a reasonably competent lawyer would have done so. In other words, AI is becoming viewed as an essential technology that could form part of reasonable professional standards. 

Lawyers and law firms are under increasing pressure to be able to justify and document when the use of AI is appropriate and when it is not. 

AI governance means having a structured, documented approach that employees understand and follow, and that you can demonstrate to regulators, clients, and insurers. 

As initial considerations, the following are the practical areas your governance strategy needs to address: 

Approved tools  

Do you know what tools are in use across your firm? An approved tools list – with documented rationale for each tool and clear conditions for its use – is a recommended foundation for oversight.  

Consumer-grade AI (e.g. ChatGPT) and enterprise legal AI (Harvey, Luminance, Microsoft Copilot with appropriate data controls) sit in fundamentally different risk categories, so the conditions for use are likely to be distinct. 

Verification obligations  

All AI-generated output that reaches a client or a court must be independently verified by a qualified person. That verification needs to be documented, not just assumed. This has been a common failure point in the cases that have reached the courts: not that AI was used, but that no meaningful check was in place. Good governance can help to prevent this. 

Staff training  

Employees can over-rely on AI without fully understanding its limitations, highlighting the importance of training. Training should cover: 

• What hallucination means in practice 
• The confidentiality implications of tool choice 
• Verification obligations  
• Real examples from recent UK cases 

It’s important that training is not a one-off induction item; it needs to be embedded in how staff are supervised and developed. 

Client disclosure 

Research from 2026 suggests disclosure could be an issue. According to Clio’s inaugural UK & Ireland Legal Insights Report, as reported by Legal Futures: 

• 79% of the public believe lawyers should disclose when they use AI 
• Only 7% of clients recall their lawyer actually doing it 

This highlights that a lack of transparency has risks for client trust, as well as compliance. The use of AI should be addressed in your client engagement letters and communications.  

Ongoing monitoring and policy review 

One thing is for certain: the AI landscape is changing quickly. Tools that were categorised as appropriate six months ago may have changed their data handling terms. Cases that establish new precedents are being handed down regularly. As a result, your AI governance policy should have a review cycle and someone who owns it. 

The regulatory direction of travel from the SRA and the courts is consistent: you are responsible for the outputs your firm produces, regardless of what produced them.  

For firms that are serious about AI governance, an internationally recognised approach – one that makes AI use auditable and credible – is an appealing option.  

ISO 42001 is the world’s first international standard specifically designed for AI management systems. It offers a way of demonstrating that your approach is not just a policy document, but an operating governance system that has been independently assessed.  

Governance is not a constraint on AI adoption; it is a way of making AI adoption sustainable and responsible. Gareth Parker, Head of Operational Compliance, captures this sentiment best. When asked about balancing innovation and governance, he said: “The fastest responsible adopters will be the ones that really corner the market.” 

Whether you’re starting from scratch or looking to build on an existing ISO 27001 programme, Amtivo offers ISO 42001 certification to those looking to adopt AI and govern its use responsibly. 

Get a quote today or contact our team for more information.