With the rapid rise of artificial intelligence, industries across the board are transforming, and the legal sector is no exception. As one of the most rapidly evolving fields, law must now adapt by integrating AI while remaining compliant with new legal standards.
Europe is the first region to take legislative action by passing the EU Artificial Intelligence Act (AI Act), marking a shift in how governments regulate AI. Previously, AI was guided by informal guidelines and widely accepted methods. Now, the EU AI Act has introduced binding legal obligations. These are no longer suggestions but enforceable rules, and companies that fail to comply may face substantial penalties.
For legal professionals, this change means learning to navigate this new environment and adhere to these detailed compliance obligations, all while ensuring these AI technologies are developed and used in ways that uphold fundamental rights, such as privacy and protection from discrimination.
Risk-Based Classification and Its Consequences
A central feature of the Act is its risk-based classification system, which categorizes AI technologies by their potential to impact people’s rights, safety, or democratic values. Some banned applications came as a surprise to experts within the tech industry, as they include tools that were previously seen as useful or harmless in academic or commercial settings.
The Act prohibits systems deemed too dangerous, such as those involving government social scoring or unauthorized biometric surveillance, which could unfairly judge people and restrict their freedoms. These practices are seen as a threat to privacy and a significant risk to individuals and society.
It also imposes compliance obligations for developers and users of high-risk AI. These include requirements for human oversight, transparency in how the systems operate, proper data management, and strong cybersecurity measures to ensure accountability and prevent misuse. Additionally, the Act mandates conformity assessments, meaning that high-risk AI systems must be tested and certified before they can be introduced to the market.
To enforce these rules, the EU AI Act includes strict penalties for non-compliance. Companies that violate the law may face hefty fines of up to €35 million or 7% of their global annual turnover, emphasizing the importance of adhering to the new regulations.
The Banned Tools You Didn’t See Coming
While the AI Act bans tools like social scoring systems and unauthorized surveillance, it also unexpectedly prohibits some widely used applications. Many previously used tools, seen as harmless or innovative, are now outlawed.
For example, AI tools that infer emotional states to track engagement or employee productivity are now banned unless explicitly used for medical or safety purposes. This affects a wide range of Tech and HR companies that rely on facial expression analysis and voice monitoring for their practices.
The Act also prohibits AI systems from inferring race, religion, political beliefs, or sexual orientation from biometric data. Even when not used maliciously, these tools are forbidden due to their potential to violate privacy and reinforce bias. Additionally, AI models that scrape facial images from the internet or utilize public surveillance footage to train facial recognition systems are now prohibited.
These restrictions are more intense than many companies expected, impacting not only surveillance companies but also marketing and research-based companies. Although the legislation is intended to prevent harm before it occurs, it also restricts the development and use of certain AI technologies that many tech companies rely on in their operations.
What This Means for Legal Teams
AI tools used in the legal sector, specifically for tasks such as document review, coding, legal research, and contract analysis, are often classified as high risk because they can significantly influence legal outcomes that affect real-life affairs.
Legal professionals, particularly those in compliance and in-house roles, are now expected to evaluate AI systems, assess their legal implications, and advise clients on the associated risks and regulations. Because this law is new and complex, many companies require expert assistance, which creates a growing demand for lawyers specializing in AI compliance.
Law firms need to hire experts and specialists in AI to ensure they are following safe legal obligations while ensuring clients comply with the Act. This has created a growing demand for lawyers and professionals who specialize in AI, opening up new business opportunities for firms that can provide this expertise. As a result, the legal field is expanding into new territory, and firms that offer AI compliance support are at the forefront of this rapidly developing sector.
LawFlex at the Forefront of AI Compliance
As the EU AI Act introduces extensive new regulations for artificial intelligence, companies across industries are under pressure to understand and meet detailed compliance requirements. This is especially challenging for businesses that lack in-house legal expertise in AI regulation or operate across multiple jurisdictions.
LawFlex has positioned itself as a leader in this space, offering legal services to help companies of all sizes navigate the complexities of AI Act compliance. With flexible, on-demand access to top-tier legal professionals, LawFlex provides solutions that combine in-depth legal expertise with a keen understanding of emerging technologies.
The firm supports clients through every stage of the compliance process by classifying AI risk levels, recommending legal alternatives, and offering real-time updates on regulatory changes, audits, and enforcement trends.
The Bigger Picture: Legal’s Role in a New AI Era
The EU AI Act is reshaping not only legal teams but the entire approach to AI development across industries. Legal departments must now take on a more proactive role, working closely with companies to ensure compliance in every stage of development from start to finish.
Tech companies are being pushed to integrate legal oversight as a core function rather than an afterthought. Investors are also placing greater emphasis on compliance, making it a top priority in funding decisions.
While these safeguards are designed to protect the broader community, the reality is that the Act demands a significant adjustment. It requires time, resources, funding, and a shift in operational mindset.
Nonetheless, the EU AI Act sets a new global benchmark for the legal sector, promoting responsible innovation while pushing industries to meet higher standards than ever before.