In the legal sector, confidentiality, data integrity and compliance are the cornerstones of professional practice. Lawyers and legal teams are entrusted with highly sensitive client information, from personal data and financial records to confidential business strategies.
As Artificial Intelligence (AI) tools become increasingly accessible, law firms are discovering their potential to streamline operations, enhance research and improve client service. But with this opportunity comes risk and one of the most pressing concerns, is the rise of shadow AI.
The hidden dangers of unsanctioned AI in law firms
Shadow AI refers to the use of AI applications by employees, without formal approval or oversight by the company’s IT team. These tools are often introduced with good intentions - to speed up routine tasks, automate document review or simplify communication. However, when deployed outside IT governance frameworks they can expose firms to serious vulnerabilities.
For example, a team member might use a free AI-powered writing assistant to draft legal documents or summarise case law. While the intent is to save time, any confidential client information entered into these platforms could be stored on external servers which are potentially accessible to third parties, risking the compromise of client confidentiality. Similarly, data fed into unsanctioned AI models may be used to train the AI itself, inadvertently sharing proprietary strategies or sensitive insights beyond the boundaries of the organisation and its security infrastructure.
There’s also the challenge of regulatory compliance. Law firms in the UK are bound by strict data protection laws like GDPR, as well as professional standards set by regulatory bodies such as the Solicitors Regulation Authority (SRA) and Financial Sanctions Regulations. Using unsanctioned AI tools could breach these obligations, potentially leading to fines, disciplinary action or reputational damage.
Proactively detecting shadow AI in your firm
Detecting shadow AI usage requires a proactive and layered approach to risk management. Organisations can deploy a combination of security technologies designed to detect and restrict unauthorised activity as well as engaging employees through surveys or informal check-ins to reveal what tools are being used, and why. Often these tools are adopted with good intentions, but without awareness of the associated risks.
Endpoint Detection and Response (EDR) tools help monitor devices for suspicious behaviour and the installation of unapproved AI applications, while network traffic monitoring and Data Loss Prevention (DLP) solutions can flag unusual data transfers to external platforms. Application whitelisting and software restriction policies can be used to ensure that only authorised software runs on company-issued devices while Security Information and Event Management (SIEM) platforms aggregate alerts to help security teams spot patterns. Together, these technologies create a robust framework for managing AI risks and maintaining control over how emerging tools are used across the organisation.
Equally important is developing a culture of security and AI awareness across the organisation. Providing regular training sessions helps employees understand the potential risks of using unauthorised AI tools, the importance of using approved platforms and the procedures for requesting new tools. By equipping staff with the knowledge to make informed decisions, organisations can reduce the likelihood of shadow AI emerging in the first place.
Building a responsible AI culture
Once shadow AI usage is identified, organisations can take decisive steps to reduce the associated risks and reinforce responsible technology use. The first priority is to establish clear, company-wide policies that define which AI tools are approved, outline acceptable use cases and set out security and compliance requirements. These policies should be communicated clearly to all staff, emphasising the potential legal and ethical consequences of using unsanctioned tools.
Regular training sessions can help reinforce this understanding, educating employees on how AI interacts with client data and the importance of safeguarding confidentiality. To support productivity while maintaining control, firms should consider offering access to vetted AI solutions that meet internal standards for security and compliance. And finally, creating open reporting channels encourages transparency, allowing staff to disclose the tools they’re using or considering, without fear of penalty. This collaborative approach helps businesses to stay ahead of emerging risks while enabling innovation in a secure and compliant way.
By taking a proactive, structured approach law firms can harness the benefits of AI while minimising potential pitfalls. Shadow AI does not have to be a silent threat. With vigilance, education and strong governance it can be brought under control and used effectively to enhance productivity, streamline legal research and improve client service - without compromising data security or regulatory compliance. The key lies in building a culture of responsible innovation, where technology is embraced with clear boundaries and shared accountability.
Mike Beevor is the CTO of Principle Networks, where he helps organisations build resilient, well-architected security ecosystems. He previously held senior positions at Zscaler and continues to advocate for the principled approach to cybersecurity that refuses to compromise long-term security for short-term convenience.
