Informed Consent in Legal AI: Navigating Ethics and Emerging Responsibilities

The rapid adoption of artificial intelligence is transforming how legal departments operate—but with these advancements come new ethical questions. For in-house counsel, one of the most pressing is how to manage informed consent and AI in legal practice. As AI becomes integrated into document review, contract drafting, and risk assessment, lawyers must ensure their clients understand how their data is used and protected. But what does “informed consent” really mean in this evolving context?

Aileen Schulz, an experienced legal professional deeply engaged in the ethical implications of legal tech. Aileen’s expertise helps frame the importance of transparency and client autonomy as fundamental pillars of ethical AI use in legal practice. Her perspective underscores that as technology evolves, the legal community must proactively adapt both its processes and its principles.

Watch the full conversation with Aileen Schulz here:

Traditional notions of informed consent involve explaining the risks, benefits, and alternatives to a proposed course of action. But AI tools often function in ways that even their developers can’t fully explain. This makes defining what counts as “informed” particularly challenging. Does simply stating that AI is being used satisfy ethical obligations? Likely not.

The nature of informed consent in AI contexts is still taking shape. Lawyers must determine the appropriate level of disclosure based on the client’s sophistication and the type of AI in use. For example, if a contract review tool uses machine learning to analyze patterns across documents, should the client know that data is being shared, even if anonymized?

New regulations are already forcing legal departments to rethink AI practices. New York City’s Local Law 144, which mandates bias audits for automated decision-making tools, points to a broader trend: regulators are moving toward transparency requirements even in the absence of explicit client consent.

In this environment, waiting for regulatory mandates is risky. Legal teams should treat proactive disclosure and client education as best practices. Being clear about how AI tools function—and how they handle data—builds trust and helps avoid future compliance issues.

An interesting dilemma arises when a client expresses discomfort with AI. Under Rule 1.1 of the ABA Model Rules, lawyers are required to provide competent representation, which increasingly includes understanding and leveraging AI tools. If a client insists on opting out of AI-assisted legal services, can the lawyer still meet the duty of competence?

This gray area underscores the importance of client communication. Lawyers must explain the capabilities and limitations of AI in a way that empowers clients to make informed decisions—without jeopardizing the lawyer’s ethical obligations.

Some AI developers now offer solutions that limit data exposure, such as federated learning or encrypted environments. These technologies can reduce risk by ensuring that sensitive client data never leaves a secure perimeter. But even with these safeguards, the ethical responsibility to obtain informed consent does not go away.

Clients deserve to know how their data is being used—regardless of whether it’s fully protected. This reinforces the idea that technology may support compliance, but it does not replace ethical judgment or communication.

The path forward requires more than technical understanding. Lawyers must combine legal expertise with a willingness to evolve their ethical practices. Informed consent and AI in legal practice is a moving target, shaped by client expectations, regulatory shifts, and technological innovation.

By prioritizing transparency, continuously updating internal policies, and investing in ethical training, in-house counsel can lead responsibly in this new era. AI may be the future—but informed, ethical legal practice will always be the foundation.

Watch the full conversation here:  Notes to My (Legal) Self: Season 6, Episode 1 (ft.Aileen Schulz)

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