Category: Technology

Artificial intelligence is now firmly part of the conversation in legal practice. From drafting assistance to document review, AI tools can help firms work faster and more efficiently. However, the real issue in England and Wales is how solicitors use AI and what safeguards they put in place rather than simply the question of whether they can use AI.

The current position from regulators is broadly supportive but cautious. The Solicitors Regulation Authority (SRA) has made it clear that firms may use technology, including AI, if they do so in a way that remains consistent with the SRA Principles and Codes of Conduct. The Law Society has also recognised that generative AI can bring real opportunities, but it stresses that human oversight, confidentiality, accuracy and responsible governance remain essential. That cautious optimism is reflected in market data too. A LexisNexis survey of more than 1,000 UK legal professionals found that 95% believed generative AI would affect the practice of law, with 38% expecting a significant impact and 11% describing it as transformative. At the same time, around two-thirds said they felt conflicted, recognising both the benefits and the risks.

What solicitors can use AI for

When used carefully, AI can assist with a range of tasks, mainly administrative and lower risk. For example, solicitors can use AI to help organise large volumes of documents, extract key themes of important information from bundles, summarise meeting notes, produce drafts of internal documents or suggest possible structure for client updates. In a way, it may also support legal research by helping lawyers identify issues to investigate further, provided any authorities, propositions or citations are independently checked against reliable legal sources.

AI may also help firms improve efficiency behind the scenes. It can be used for workflow support, document classification, knowledge management and administrative triage, particularly where systems are secure and the firm understands what data is being processed. The ICO’s guidance on AI and data protection is especially important here. If personal data is involved, it is important that firms think about fairness, transparency, security and whether a data protection impact assessment is required. Confidential client information should never be treated casually simply because a tool is convenient.

What solicitors cannot, or should not, use AI for

Solicitors cannot rely on AI to give legal advice without proper human review. An AI-generated answer may sound confident and well written while still being incomplete, outdated or simply wrong. This matters because solicitors remain responsible for the quality of the advice given in their name. They cannot shift liability to a software provider or argue that the system produced the error. If legal advice is given to a client, a qualified professional must still assess the facts and apply the law correctly.

The same is true for court work. AI should not be used to generate authorities of quotations that are then filed or relies on without checking. Use of AI in producing court papers is increasing, and the judiciary has issued guidance for judicial office holders on responsible use. This makes verification even more important. Recent guidance has highlighted the danger of AI ‘hallucinations’, including fabricated case citations and misleading statements of law. A solicitor’s duties to the administration of justice, honestly and competence still apply in full, regardless of how the first draft was produced.

Solicitors also should not paste confidential or privileged information into public AI tools, unless they are certain that doing so is permitted, secure and compliant with their professional and data protection obligations. This is one of the clearest red lines. If client data is uploaded into an external system without proper controls, the risks may include loss of confidentiality, unclear data retention, and unauthorised reuse of sensitive material. For many firms, that means using only approved systems with clear contractual protections and internal policies.

For solicitors, then, the answer is not that AI is forbidden. It is that AI must be used responsibly and with strict professional control. The firms that benefit most will not be the ones that hand legal thinking over to technology, but instead the ones that use it as a careful assistant while keeping human expertise, ethics and accountability at the centre of legal advice.

In a world of ultra-realistic images, can you trust your eyes? Recently, we shared two side-by-side pictures — one a genuine photo, the other generated entirely by AI. Most people found it impossible to reliably tell which was which. And that’s the point.

The New Frontier of Risk

The rise of AI-generated media — deepfakes — isn’t just a cool (or creepy) technological novelty. For the legal industry, it’s a profound challenge:

• Evidence Integrity Under Threat
  AI can create hyper-realistic photos, audio, and video that are indistinguishable from genuine material. This raises serious doubts about what counts as “real” in court.

• Fake Legal Authority
  Beyond visual fakes, there is a real danger in AI inventing legal citations. Judges have already warned lawyers about relying on non-existent cases generated by AI tools. In some jurisdictions, that can lead to sanctions — even severe ones.

But It’s Not All Dark — AI’s Bright Side in Law

Despite the risks, AI is not inherently evil. When used responsibly, it has enormous potential to transform legal practice — for the better.

• Efficiency & Productivity Gains
  AI tools can analyse huge volumes of documents, extract relevant information, and summarise case law far faster than a human ever could.

• Faster, Smarter Legal Research
  AI-powered legal research tools can help lawyers quickly identify precedent, spot risks, and draft more strategic arguments.

Why We Must Stay Vigilant

Given the dual nature of AI — powerful and perilous — law firms must adopt a cautious, principles-led approach:

1. Develop a Robust AI Policy
   Law firms need clear internal rules around how AI is used, who is responsible for checking its outputs, and how client data is protected.

1. Human Oversight Is Critical
   Generative AI isn’t infallible — it can “hallucinate” false legal citations or produce incorrect facts. Lawyers must always verify the outputs before relying on them.

What are your thoughts?
Does this future feel more exciting or more terrifying?
We’d love to hear your perspectives.

A cryptocurrency is a digital virtual currency which uses encryption technology, or cryptography in its creation to ensure the security of transactions involving its use. The original was Bitcoin, but there are many others including Dogecoin, LiteCoin and Ripple.

Over the past year or so, many types of cryptoassets have gained value and popularity as an investment option. Tesla Billionaire Elon Musk famously invested $1.5 billion in Bitcoin, and was credited with raiding the prices of Bitcoin and other cryptocurrencies through Twitter.

The UK’s approach to taxation of Cryptocurrency

As cryptocurrency investment levels and usage increases, global regulators are yet to establish a coherent approach to taxation across all jurisdictions.

There is a school of thought that disposal of crypto assets can be likened to gambling or lottery type winnings, however, this is not correct.

Cryptoassets aren’t treated by HMRC as a currency or money, with HMRC stating that ‘A trade in crypto asset exchange tokens would be similar in nature to a trade in shares, securities, or other financial products’ with case law which treats share trading as a benchmark for the tax treatment of crypto.

In the UK, cryptoasset gains (for Capital Gains Tax) are measured at the point the cryptoassets are sold, including when one currency of cryptoassets is exchanged for another (e.g., exchanging Bitcoin for Dogecoin) so unless there is a disposal there will be no Capital Gains Tax due. HMRC’s guidance notes state that whether tax applies will hinge on whether trade is being carried on. If the buying and selling of exchange tokens amounts to a trade will depend on factors which include frequency, level and type of the organisation and the intention of the exchange.

If it’s determined that the exchange(s) amount to trade, the receipts and expenses become a part of the calculation of the trading profit of that individual or company. This means that the profits from the trade will be also be subject to Income Tax.

For Individuals:

For individuals who are not trading there is a tax-free Capital Gains Tax allowance of £12,300 during the current 2020-2021 and subsequent 2021-2022 tax years. Additional gains will be taxed at either 10% or 20%, but this will depend on the level of the individuals other income.

Finding that an individual’s activities amount to trading, and therefore subject to Income Tax, is unusual. However, if the activity is considered to be trading then for individuals’ Income Tax will take priority over Capital Gains Tax and will apply to profits (or losses). The amount that needs to be paid will depend on the individual’s other income.

What about businesses?

For businesses trading in cryptoassets, the profits or losses will form part of the trading profits instead of being a chargeable gain for Capital Gains Tax.

Because crypto isn’t treated as a currency, companies are likely to exchange tokens as ‘intangible assets’ which will be taxed under Corporation Tax rules for intangible fixed assets if the token is an ‘intangible asset’ for accounting purposes and an ‘intangible fixed asset’ which means the asset has been created or acquired by a company for use on a continuing basis. However, if the tokens are held by the company, they will not meet this definition.

When the gains and losses are calculated from the disposal of crypto tokens, not all costs will be allowable as a deduction, as governed by Section 38 of the Taxation of Chargeable Gains Act 1992. HMRC’s view is that deductible costs include:-

• The consideration (in £ sterling) originally paid for the asset;
• The transaction fees paid for having the transaction included on the distributed ledger;
• Advertising for a purchaser or vendor;
• Professional costs to draw up a contract for the acquisition or disposal of the tokens; and
• Costs of making a valuation or apportionment to be able to calculate gains or losses.

These will be deducted against profits for Income Tax will not be allowable as deductions for Capital Gains Tax. VAT will also be due in the normal wat on goods or services sold in exchange for cryptoasset exchange tokens.

Sources:

Financial Times: https://www.ft.com/content/ec2dc503-467a-4627-b35c-1c5aebb65010

Accountancy Daily: https://www.accountancydaily.co/hmrcs-cryptocurrency-tax-treatment-introduced-without-law

HMRC Cryptoassets Manual: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual

 

AI has taken a big swing at chess players, poker players, go players and now lawyers! A showdown between some of the best lawyers in the world and an AI intelligence platform LawGeex, over an interpretation of contracts resulted in the humans losing, again.

The challenge had twenty lawyers go up against the AI platform in consultation with law professors from Stanford University, Duke University, School of Law, and University of Southern California – both were given four hours to review five non-disclosure agreements (NDAs), identifying 30 legal issues, this included things like arbitration, confidentiality of relationship and indemnification. The scoring happened by accuracy in indemnifying each issue.

Humans took another tumble against the rising force of smart machines with an 85% accuracy rate. The AI smashed that out of the water with 95% accuracy. What makes this even scarier is it took the humans 92 minutes on average, but the AI completed it in 26 seconds.

This is a task lawyers undertake daily, but this still didn’t assist in the competition. The AI scoring the highest result achieved 100% accuracy in one contract, against the human whose highest result is 97%.

So, what does this mean for the legal industry?

When a computer can complete intricate and complicated jobs like this, it’s easy to see the threat posed to the industry as a whole, we see the looming threat of computerised legal offices dealing with every need in mere moments, but it’s not as dystopian as that.

“Having the AI do a first review of an NDA, much like having a paralegal issue spot, would free up valuable time for lawyers to focus on client counselling and other higher-value work,” said Erika Buell, clinical professor at Duke University School of Law, who LawGeex consulted for the study. 

These tools will come into the market, and there is a place for them, but like the computer on your desk it’s simply a tool and will only serve to make the process easier and quicker for both the solicitor and their clients. We feel there’s only good to come from this, but it’s a fascinating step into the future at the very least!

You may of heard that the city of Chicago (possibly having some financial trouble and a creative finance team) had decided to place an ‘amusement tax’ on Internet related services, this not only means streaming services like Netflix and Spotify but also gaming services like PlayStation live or World of Warcraft will have to jump their prices to Chicago subscribers. Continue reading “Chicago being sued over Netflix tax”