Making Legal Decisions and Managing Legal Risks in an AI World: A Better Approach

Abstract: Advances in AI have propelled it to the forefront of applications efforts in many different fields, including legal decision-making and managing legal risks. Assertions are made that AI tools can used to analyze past case outcomes, judicial rulings, and legal precedents to predict the likely trajectory and outcomes of litigation. In this paper, we will present the results of our search for evidence of actual use, along with an evaluation of the strengths and weaknesses of such use.However, there are fundamental conceptual and practical limitations to this approach, including the fact that almost all cases are resolved through settlement with a resolution that remains confidential and is not publicly reported. Further, use of AI for legal decisions raises significant risks inherent to the way AI works (e.g., algorithmic bias, lack of transparency, etc.) and ethical, regulatory, and due process concerns. A better approach is to use AI for the purposes it is eminently suitable and superior for and to use Decision Analysis for making decisions in risky, complex situations like managing legal risks and making legal decisions. Decision Analysis was developed over 50 years ago for making better decisions in complex and risky situations and is standard and required in a number of high-stakes, high-risk industries like drug development and oil and gas development. However, its application for legal decision-making and risk management is very limited for reasons discussed in this paper. We present an approach for understanding and applying AI and Decision Analysis appropriately in the legal arena, including a survey of current AI and Decision Analysis analytical tools for legal. This paper will build upon the conceptual foundation described in (reference to 2021 ICIA paper) and present a practical and theoretically sound approach for integrating AI and Decision Analysis in future technology for decision making and risk management in general and, in particular, in the legal arena.

Keywords: AI, artificial intelligence, decision analysis, legal risk management, decision making

DOI: 10.54941/ahfe1006925

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