Can AI Write Your Shareholders’ Agreement? Transcript:
So, picture this: you need a shareholders’ agreement. You’ve heard that ChatGPT can write anything, and you think, ‘Why spend hundreds of pounds on a solicitor when I can just ask the robot lawyer?’
Well, here’s the problem: ChatGPT is not a lawyer. It doesn’t know your company, your deal or the fact that your co-owner Dave has made provision in his will for his dog to inherit his share of the business.
You may have already heard of some of the spectacular real-world fails. In the US, a couple of lawyers famously used ChatGPT to draft court submissions, only to discover it had confidently invented six completely fake legal cases. Judges were not amused.
Closer to home, we’ve seen a recent increase in clients sending us contracts they’ve ‘drafted’ themselves and want us to review, and whilst there’s no denying these are often a really good starting point, those we’ve seen to date aren’t fit for purpose. Key clauses are usually missing, terms are often unenforceable and, in one case, I was sent a confidentiality agreement, which actually gave away the confidential information. Oops!
Now, don’t get me wrong, I am not bashing AI. In fact, I’m a huge champion of integrating AI tools into legal work. It can be great for brainstorming, summarising and explaining concepts. When it comes to legal documents, it’s just not there – yet. I find myself often explaining to clients that, whilst they might feel certain wording is overly legal, a benefit is that it’s been tried and tested through the courts and provides them with the security and assurance they need.
If you needed surgery, I’d like to think you wouldn’t open up WebMD, grab a kitchen knife and your sewing kit and give it a go yourself. But, if you’re using ChatGPT to draft your legal documents, that’s basically what you’re doing. AI is great for background reading and aiding your understanding, but it’s just not ready to pick up the scalpel.
So by all means, use AI for ideas, but when you need something watertight, I’d strongly recommend you call your friendly human legal team. We’re not free, but we’re much better at keeping you out of court or making sure you’re in a safe position if you do find yourself there. And as an added bonus, the work we do is based on years of extensive legal training, rather than hallucinated case law.