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Robert C. Dortch, Jr. | Sellers Hinshaw Ayers Dortch & Lyons PA | Charlotte
Camille Stell
Camille Stell is President of Lawyers Mutual Consulting and Services, offering succession planning, business development coaching, keynote presentations and more. Continue this conversation by contacting Camille at camille@lawyersmutualconsulting.com or 800.662.8843.
Artificial Intelligence (AI) continues to revolutionize how legal professionals conduct research, analyze data, and produce documents. For solo and small law firms in particular, AI seems to promise efficiency and affordability. But the convenience of free AI tools can come at a steep ethical and professional cost—especially when dealing with confidential client information such as medical records, police reports, or financial disclosures.
This article highlights the specific risks of free AI platforms, summarizes the North Carolina State Bar ethics opinion on AI, and offers practical tips for safely integrating AI into your practice.
What the NC State Bar Says About AI Use
In 2024 Formal Ethics Opinion 1, the North Carolina State Bar made clear: lawyers are permitted to use AI in their practices—but only if they do so competently, securely, and with proper supervision. Key takeaways include:
AI must not compromise client confidentiality: Lawyers are required under Rule 1.6(c) to make reasonable efforts to prevent unauthorized access to client information. That includes ensuring the AI platform won’t use client data to train its model.
Competence includes technological understanding: Per Rule 1.1, lawyers must stay abreast of technological changes—including understanding the benefits and risks of AI tools used in legal practice.
You can’t outsource responsibility: Whether work is done by a paralegal, summer associate, or AI program, the lawyer must independently review and take full responsibility for all outputs used in client matters.
Client consent may be required: If a lawyer uses AI in substantive legal tasks (e.g., drafting estate plans, contracts, or pleadings), and especially if the tool affects fees or billing, the client must be informed under Rule 1.4.
Avoid free public AI tools for client-specific data: The opinion cautions lawyers against inputting sensitive information into publicly accessible AI platforms that may store, retain, or use submitted data for model training.
High-Risk Areas for Confidentiality Breaches
Some legal practice areas are especially vulnerable when using unsecured AI tools:
Personal Injury & Medical Malpractice: Summarizing client medical records in free tools may violate HIPAA.
Family Law: Custody evaluations, financial affidavits, and therapy notes must remain confidential.
Criminal Defense: Sharing police reports or client statements in AI platforms could undermine privilege.
Elder Law & Estate Planning: Drafting wills or powers of attorney through AI requires safeguards against data leakage.
Red Flags in Free or Consumer-Grade AI Tools
Ask the following before using any AI platform:
Is the platform trained on user-uploaded data?
Are there binding terms about confidentiality and data retention?
Is data encrypted at rest and in transit?
Can you delete client data from the system permanently?
Is this platform created for legal use—or for general consumers?
If the answer is uncertain, do not use that platform with client information.
Best Practices: How to Use AI Responsibly in Your Firm
1. Choose the Right AI Platform
Pick vendors who design tools specifically for legal professionals and who offer:
Written confidentiality and non-disclosure agreements
Data residency and encryption
Opt-out provisions for model training
Clear client data ownership and deletion policies
Evaluate vendors by reviewing their company reputation, data security protocols, and contract provisions for how data is stored and destroyed if services end.
2. Vet Every AI Tool Like a Vendor
Think of AI platforms like any third-party contractor. You are obligated to ensure they operate in a way that’s compatible with your ethical duties. This includes:
Periodic audits
Security consultations
Ongoing training for your team
3. Maintain a “Human in the Loop”
Inquiry 4 of the AI opinion asks “if a lawyer signs a pleading based on information generated from AI, is there variation from traditional or existing ethical obligations and expectations placed on lawyers signing pleadings absent AI involvement?” The opinion response is “no, a lawyer may not abrogate their responsibilities under the Rules of Professional Conduct by relying on AI”.
You must always review the AI’s output. AI hallucinations (inaccuracies) are still a real risk. Use the correct AI tools – for example, don’t trust legal citations to ChatGPT or Microsoft CoPilot, rely on the legal research tools which have their AI incorporated into the products for brief writing or legal research.
4. Be Transparent About Fees
The State Bar prohibits the lawyer for billing a client for three hours of work when only one hour of work was completed. While AI will provide efficiencies, the lawyer’s billing must be accurate, honest and not clearly excessive. Most law firms need to engage in discussion to determine how to bill for efficiencies that result from using AI tools. Flat fees or itemized charges for AI usage are allowed, provided they are transparent and not excessive.
5. Avoid Inputting Confidential Information Into Free Tools
Unless the tool offers specific enterprise safeguards or is configured for legal compliance, don’t risk uploading client files. This includes tools like ChatGPT, unless using a business or enterprise version that allows full control over data privacy.
Bottom Line: Ethics Over Efficiency
AI can support faster research, more consistent drafting, and improved client service. But convenience should never come at the cost of compliance—or client trust. By choosing tools carefully, training staff, and maintaining independent professional judgment, even solo and small firm lawyers can benefit from AI while staying fully within ethical bounds.
We’re talking with Pegeen Turner, owner of Legal Cloud Technology, and now founder of Law Firm Defender. Her company specializes in managed IT services tailored for law firms — a topic many solos and small firms want to better understand.
Q: Pegeen, thanks for joining us! Let’s start with the basics — what is Law Firm Defender, and what inspired you to start it?
A: Thank you! Law Firm Defender is a managed IT services company built specifically for law firms. After more than 20 years working with lawyers on their technology, I saw a clear need for reliable, proactive IT support — especially for smaller firms that don’t have in-house IT teams. I wanted to create a law firm specific service that not only solved problems but prevented them from happening in the first place. I also found that so many IT companies say they work with law firms, but they don’t know how law firms operate or their software. We know law firms and their software. We understand that downtime is critical for a small firm and try to be as responsive as possible.
Q: “Managed IT services” is a term we hear more and more, but not everyone knows what it actually means. Can you explain it in plain English?
A: Absolutely. Managed IT services means outsourcing your technology management to a company that handles it all for you — like having a full-time IT department, but without hiring one. We monitor your systems 24/7, update your software and security tools, back up your data, troubleshoot problems, and help you plan for future needs. It’s a monthly service model, so it’s predictable, scalable, and proactive.
Q: How is that different from just calling a tech person when something breaks?
A: Great question. That’s called “break/fix” support — and it’s reactive. You’re putting out fires, often at the worst possible time. Managed services, on the other hand, are proactive. We’re watching your systems in real time, applying security patches, making sure backups are running, and often fixing issues before you even notice. It’s like the difference between going to the ER and having a primary care physician who helps you stay healthy.
As Law Firm Defender has been working with firms over the last year, we found that smaller firms need flexibility. The true MSP model doesn’t work for all firms. Some firms want that comprehensive service and other firms need security services to protect them, but don’t want to pay a monthly fee for help desk that they don’t need or want. We offer that flexibility. When we onboard a new law firm client, we talk about their needs and put systems in place that will work best for them and their budget.
Q: What kinds of things do you take off a lawyer’s plate when you manage their IT?
A: We handle everything from setting up secure email and document management systems to managing antivirus, firewall protection, and device encryption. We make sure that your systems are up to date, provide recommendations on how to ensure that your systems and data are safe and secure. We run regular security audits, provide cybersecurity awareness training, and make sure your software is compliant with industry and state bar standards. We also help with transitions — like when you are starting a new firm, hiring, moving to the cloud, or updating software. We’re your law firm IT partner, not just a vendor who does not know your business.
Q: A lot of solo and small firm lawyers are concerned about cybersecurity. How does Law Firm Defender help there?
A: That’s one of our biggest focus areas. Law firms are prime targets for cyberattacks, and small firms are often the most vulnerable. We build layers of defense — including endpoint protection, multi-factor authentication, encrypted communications, and backup/recovery plans. We also help lawyers understand what ethical obligations they have around technology and data protection, and how to meet them.
Q: What’s the ideal time for a lawyer to bring in a company like yours?
A: If you’re relying on DIY tech or a friend who “knows computers,” it’s time. Ideally, before you have a data breach, ransomware attack, or major tech failure. But even if you’ve already experienced one of those, we can help you rebuild smarter. We work with solo attorneys just starting out as well as small firms with 5–10 lawyers. It’s never too early to take IT seriously.
Also, if you are not sure what you are getting out of your current MSP, I am happy to chat! Often, the firms who come to us for advice don’t understand what they are getting with their current MSP. They pay a lot of money and are not sure what type of response / service they should receive. They think because they are small, it should take their IT folks time to get back to them. But time is money for law firms! That is now how your IT service should work.
Q: What’s one thing you’d want every small firm lawyer to know about managing their IT?
A: You don’t have to do it alone — and honestly, you shouldn’t. Technology is now a core part of how law is practiced. Having professional IT support isn’t a luxury — it’s part of running a secure, ethical, and efficient law practice.
Q: How can someone learn more about working with Law Firm Defender?
A: Visit www.lawfirmdefender.com or reach out to me directly. We offer consultations to assess your current setup and help you figure out what level of support makes sense for your firm. We’re here to make technology work for you — so you can focus on your clients.
Artificial Intelligence is rapidly reshaping legal work—offering powerful tools for research, drafting, contract review, and case management. But with great power comes great responsibility: you must understand both the promise and the risks to remain ethical, competent, and compliant.
Why You Should Read 2024 Formal Ethics Opinion 1
On November 1, 2024, the North Carolina State Bar issued 2024 Formal Ethics Opinion 1 – “Use of Artificial Intelligence in a Law Practice”. It provides clear guidance about:
Maintaining competence under Rule 1.1, including understanding AI’s strengths, invisible biases, and “hallucinations” (Clearbrief)
Protecting client confidentiality (Rule 1.6)—only use AI platforms with strong security, encryption, and clear data handling protocols (North Carolina Bar Association)
Supervising use of AI (Rule 5.1 & 5.3)—you must oversee how associates or non-lawyers use such tools (One Legal)
Reasonable billing (Rule 1.5)—don’t bill clients for AI speed-ups; ensure your fees reflect actual work (One Legal)
Tech is evolving daily. It is up to each of us to stay informed. We encourage following reputable blogs and news outlets:
North Carolina’s own coverage through news reports in NC Lawyers Weekly, bar association newsletter articles, and the NC State Bar publications.
Bob Ambrogi’s blog, LawSites, was among the first legal blogs. He offers robust articles about breaking news in technology, including the issues of AI’s legal and ethical concerns such as hallucinations, confidentiality risks, supervision, billing, etc.Â
Jordan Furlong is a lawyer, thought leader, and strategist who writes about the best new ideas and strategies for transforming the legal world through his blog on Substack, available through a free subscription.
Clio, the cloud-based, practice management software, provides excellent information available whether you are a subscriber of their software or not. Their resources include blog posts, e-books, white papers, surveys, and sample AI policies for your law firm.
Be Wary of “Free” AI Tools & Misuse
Free, consumer-grade AI tools often come with hidden costs and ethical traps:
Hallucinations: AI-generated text may look convincing—but contain fake cases or citations. UK courts recently flagged this citing of nonexistent cases as a “risk to justice”. You must use appropriate legal research platforms – all of them have their own AI proprietary tools – rather than asking for help from ChatGPT or Microsoft CoPilot. Always verify case law and statutes.
Breach of confidentiality: Entering client data into a public AI provider like ChatGPT could expose sensitive information or violate privilege unless proper safeguards are in place.
Hidden terms of service: Many free AI tools retain your input for training or allow third-party data access without you realizing. Vet terms of service thoroughly and never use free tools.
Security gaps (“shadow AI”): When team members use unauthorized AI tools, they may bypass cybersecurity protocols. Establish approved platforms and clear firm policies. The Clio website has sample AI policies for law firms to implement.
Practical Tips for Ethical AI Adoption
Read and understand 2024 FEO 1 thoroughly. Include the opinion alongside your AI use policies.
Maintain tech competence—attend CLEs, read tech blogs, and attend workshops and CLEs. Obtain an AI certification – many of the top universities offer online certification programs, as well as LinkedIn Learning, or training classes through MasterClass.
Vet all AI tools: look for encryption, data usage transparency, secure deletion, and jurisdictional compliance. If you aren’t sure how to do this, work with a technology consultant such as Pegeen Turner with Legal Cloud Technology or reach out to Catherine Sanders Reach with the NC Bar Association Center for Practice Management.
Track and supervise usage: know who uses what AI, how often, and for what.
Update client agreements: include AI disclosures, consent language, and how efficiency savings will be passed on.
Verify outputs: always humanreview AIgenerated research, memos, or filings.
Summer is here—and with it comes a perfect storm of deadlines, distractions, and disrupted routines. Mid-year caseloads are building. Attorneys, paralegals, and legal assistants are heading out for long-awaited vacations. Court schedules don’t slow down. And all of it puts pressure on the backbone of every law office: the calendar.
In a profession where missed deadlines can lead to malpractice claims, stress, and lost client confidence, effective calendaring is not just a suggestion, it’s a risk management essential. Now is the ideal time for paralegals to lead a mid-year calendaring audit and ensure the firm is aligned, protected, and prepared.
The Risk of Calendar Gaps
Calendar-related malpractice claims consistently top the charts at Lawyers Mutual. Missed deadlines, especially those tied to court filings, statutes of limitation, and discovery cutoffs, are among the most preventable causes of professional liability claims.
Paralegals play a central role in protecting the firm from these calendar pitfalls. But even well-meaning efforts can fall short if the systems in place are outdated, inconsistent, or reliant on a single person’s memory.
A few common risk points include:
Solo calendaring: One person maintains the schedule, and no one else has access.
Shadow calendars: Different team members track their own deadlines in different systems (paper, Outlook, phone apps), creating silos and gaps.
Lack of cross-checking: No redundancy or backup system for critical dates.
Vacation overlaps: Multiple team members off at once, with no clear coverage plan.
Your Mid-Year Calendar Checkup
To mitigate these risks and increase efficiency, consider launching a summer calendar audit using these best practices:
1. Conduct a Teamwide Calendar Review
Bring together attorneys, paralegals, and administrative staff to review active matters and key upcoming deadlines. Confirm that all known court dates, client milestones, and internal due dates are reflected on the firm calendar.
2. Standardize Your Calendar System
Ensure the entire team uses a centralized calendar platform, preferably one with cloud access, shared permissions, and reminders. Outlook, Clio, PracticePanther, and MyCase offer robust calendaring tools. Avoid isolated or duplicate tracking systems.
3. Implement Redundancy
Establish a two-person rule for every calendar entry: one person enters, and another verifies. Back up digital calendars with periodic printed reports for critical case timelines.
4. Build a Vacation Protocol
Create a vacation coverage calendar so everyone knows who is out and who is covering key tasks. Schedule pre-vacation case handoffs and designate backup reviewers for deadlines falling during absences.
5. Integrate Reminders and Alerts
Use technology to your advantage. Set up multi-level reminders (e.g., one week, three days, and same-day) for major deadlines. Consider using project management tools like Trello, Asana, or Microsoft Planner alongside the master calendar.
Paralegals as Calendar Champions
Paralegals are uniquely positioned to bring clarity to calendaring chaos. You are often the touchpoint between attorneys, courts, and clients—and you understand the daily flow of the office better than anyone. By taking the lead on calendar hygiene, you protect the firm’s reputation, reduce stress, and contribute directly to client satisfaction and firm safety.
As you ease into summer, take a moment to ask: “Is our calendar system bulletproof?” If not, now is the time to act.
An Interview with Mark Scruggs, Senior Claims Attorney
At Lawyers Mutual, we understand that receiving a subpoena can be a stressful and unfamiliar experience for many attorneys. Whether it’s a subpoena for documents, a deposition, or court testimony, the legal and ethical implications can raise important questions. That’s why one of the unique benefits available to our insureds is subpoena assistance—a resource designed to provide guidance and support in these challenging moments. To shed light on how this benefit works and how attorneys can take full advantage of it, I sat down with Mark Scruggs, our Senior Claims Attorney, who brings a wealth of knowledge and practical advice to the table.
LM: What is the “subpoena assistance” benefit?
MS: The Lawyers Mutual Professional Liability Policy includes a “subpoena assistance” benefit for our insureds who receive a subpoena to testify at a deposition or a trial, or to produce documents, related to acts or omissions of the insured that the Policy otherwise covers. The subpoena assistance benefit is in Section IV of the Insuring Agreement, titled “Additional Benefits.” (There are three other “benefits” in Section IV, that we can discuss at another time.) Here is the applicable policy language:
IV. Additional Benefits. Payments made pursuant to this section will not be subject to the deductible and will not reduce the limit of liability or aggregate set forth in the Declarations. The amount payable under this section shall not exceed a Policy aggregate of $5,000
*Â Â Â Â Â Â Â Â *Â Â Â Â Â Â Â Â Â *
(b) Subpoena Assistance — The Company will provide counsel to represent an Insured who receives a subpoena to produce documents and/or provide testimony related to act(s) or omission(s) in the provision of legal services if such legal services were provided after the prior acts date of such Insured, and the subpoena is issued during the policy period or any extended reporting period, provided such Insured has not been retained and is not being requested by a party to provide expert testimony in connection with the suit or proceeding in which the subpoena has been issued.
LM: Why is it important?
MS: It seems that at least once a week, an insured will call to report that they have been served with a subpoena asking them to produce their client file or to appear and testify concerning their representation of a former or current client. The subpoena often originates from someone other than the attorney’s client.Â
The call to Lawyer’s Mutual is prompted by the lawyer’s recognition that such a subpoena probably runs afoul of Rule of Professional Conduct 1.6 – Confidentiality – Essentially, everything the lawyer knows about the client’s legal matter that the lawyer learned while representing the client is confidential and cannot be divulged except in limited circumstances.
LM: How does it work?
MS: We will often retain counsel for the insured under the Additional Benefits coverage to file a Rule 45 (c)(3) Written Objection to the Subpoena or a Rule 45(c)(5) Motion to Quash or Modify Subpoena, depending on what the subpoena commands the lawyer to do. (We also have many form motions that we can provide for our insured if they want to file the motion themselves.)Â
The Additional Benefits coverage is limited to $5,000 per policy year. So, if you receive two subpoenas during the policy year and we retain counsel for you on both, you will only have a maximum of $5,000 available to pay defense costs. If the defense costs exceed the $5,000 per policy year limit, we may have to trigger your deductible for the overage.
LM: Does using the subpoena assistance benefit impact my deductible or my coverage limits?
MS: The answer is “No.” Payments made under the Additional Benefits coverage are not subject to the deductible and do not reduce the limit of liability under the Policy. As I said before though, the Additional Benefits coverage is limited to $5,000 per policy year. In summary, the Additional Benefits coverage for subpoena assistance is a valuable benefit that can help you comply with your ethical obligations to your clients and save time and worry.Â
As our conversation with Mark Scruggs illustrates, subpoena assistance is just one example of how Lawyers Mutual goes beyond traditional coverage to provide practical, real-world support to our insureds. Whether you’re navigating a complex legal issue or simply unsure about your obligations, you don’t have to face it alone. Our experienced claims attorneys are here to help guide you through the process—confidentially, professionally, and with your best interests in mind. If you receive a subpoena or have questions about this benefit, don’t hesitate to reach out. That’s why we are here, “Lawyers Helping Lawyers”.
