The Australian legal profession's AI governance context
Australian legal practitioners — solicitors, barristers, and in-house counsel — are adopting AI tools for legal research, document review and due diligence, contract analysis and comparison, legal drafting, and practice management. The adoption is rapid and largely driven by efficiency pressures. The governance context is shaped by state and territory professional conduct rules, privacy law, evidence rules, and professional indemnity insurance requirements.
Unlike some jurisdictions where regulators have moved slowly on AI guidance, Australian legal professional bodies have been relatively proactive. The Law Society of New South Wales, the Law Institute of Victoria, and the Queensland Law Society have all issued guidance on AI use by legal practitioners. This guidance is not binding in the same way as professional conduct rules, but it signals regulator expectations and will likely inform how conduct complaints are assessed.
Confidentiality and solicitor-client privilege
The solicitor's duty of confidentiality is one of the foundational obligations of legal practice. It applies to all information received in the course of acting for a client, not just formally privileged communications. AI tools create specific confidentiality risks that practitioners must address.
When a solicitor uploads client documents to an AI tool, they are transmitting that information to the AI provider's servers. The key questions are: what data handling agreements are in place? Does the AI provider's terms of service permit use of uploaded data for model training? Where are the servers located? Are there adequate confidentiality protections? Consumer AI tools — free accounts, standard subscriptions without enterprise data processing agreements — are generally inadequate for client documents and privileged information. Enterprise AI tools with appropriate data processing agreements may be suitable, but require assessment.
Solicitor-client privilege requires that privileged communications be kept confidential. Disclosure to a third party — including an AI provider without appropriate contractual protections — may constitute waiver of privilege. This is not a hypothetical risk: in contested litigation, opposing parties may seek to argue that uploading privileged documents to AI tools waived privilege. The prudent approach is to ensure any AI tool handling client files has a clear, enforceable confidentiality agreement that does not permit use of the data beyond the service.
AI hallucination and the duty of candour
Australian practitioners have encountered AI hallucination in legal research — AI-generated citations to cases that do not exist, with case names, citation formats, and even brief summaries that appear authentic. Several Australian lawyers have had their AI-generated submissions tested by opposing counsel or the tribunal, with embarrassing and in some cases professionally consequential results.
The duty of candour to courts and tribunals (rule 19 of the Solicitor's Conduct Rules in most Australian jurisdictions) requires that solicitors not make any statement to a court or tribunal that they know or reasonably should know is false or misleading. Submitting AI-generated research without verification — when the practitioner knows AI tools hallucinate — creates a real risk of breaching this duty. All AI-generated legal research, case citations, statutory references, and factual claims must be verified against primary sources before use in any submission, advice, or document that matters.
