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44 P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | W I N T E R 2 0 2 4 Risk Mitigation Consider this: a single AI-related ethical breach could cost your firm dearly, not only in potential lawsuits or regulatory fines but also in reputation damage that could take years to recover from. AI governance acts as an insurance policy against these risks. Like a seatbelt, it's essential for protection, even if you hope never to need it. Highlight specific risks that AI governance can mitigate, such as data privacy breaches, biased decision- making, and non-compliance with regulations. Quantify these risks where possible. What would be the potential cost of a major data breach? What about a class-action lawsuit alleging AI bias in your firm's practices? Spend time estimating the likely costs of AI-related dilemmas. Framing AI governance as a critical risk management tool shows that it is an essential, rather than optional, part of AI adoption. Competitive Advantage In an environment where many law firms are jumping on the AI bandwagon, robust AI governance could be your competitive advantage, like having a high-performance vehicle in a crowded market. Clients are becoming increasingly savvy about AI and its implications. Many are starting to ask tough questions about their data usage and what ethical safeguards are in place. A firm with strong AI governance can confidently answer these questions, building trust and potentially winning more business. Moreover, as regulations around AI in legal practice inevitably tighten, firms with established governance frameworks will be ahead of the curve. Instead of scrambling to comply – your firm will already be there, maybe even helping to shape the regulations themselves. programs, potential new hires (like AI ethics officers), and the time spent developing and implementing policies. On the benefit side, consider the reduced risk of ethical breaches or regulatory fines, improved client trust and satisfaction, and potential competitive advantage in the market. There are also less tangible benefits, like improved decision-making processes and a more ethically aware firm culture. These might be harder to quantify, but they are no less valuable.

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