Risk Update

AI OCGs, You See — OCGs and Client Needs for Firm AI, Guidelines, Guardrails and AI Growth

These sentiments definitely align with the feedback shared by risk leaders in the survey report on AI for law firm risk we published last week.

What Corporate Clients Want to Know About Law Firms’ Use of AI” —

  • “Artificial intelligence has become a routine topic of discussion between law firms and their corporate clients, but the nature of those conversations has changed significantly over the past few years. Early discussions often centered on whether outside counsel should use AI at all. Today, clients have moved beyond that threshold question and instead want to understand how AI is being used, what safeguards govern its use, and how it can create greater value without compromising quality, confidentiality, or professional judgment.”
  • “Rather than asking whether a firm uses artificial intelligence, clients want to understand how AI fits into legal workflows, which tools are being used, what tasks they support, how client information is protected, and what level of attorney oversight exists before work product reaches the client.”
  • “As Andrew Woolf, Chief Strategy and Innovation Officer at Cozen O’Connor, explained: ‘Across the board, the questions are becoming more practical, detailed, and technical. The question has moved from ‘Are you using AI?’ to ‘How are you using it, and how are you controlling it?’’ He explained that clients want detailed information regarding the AI models and platforms firms use, whether client data is retained or used for model training, what security controls are in place, and how attorneys supervise AI-assisted work.”
  • “Several interviewees also observed a notable shift in client attitudes toward AI itself. Aubrey Bishai, Chief Innovation Officer at Vinson & Elkins, explained that conversations have evolved from clients saying, ‘Don’t use AI on my matters’ to now saying, ‘Please use AI on my matters where it makes sense.’ According to Bishai, today’s discussions focus less on whether AI should be used and more on where it can appropriately support legal work, while fostering greater transparency and collaboration between law firms and in-house legal departments.”
  • “Alma Asay, Chief Innovation and Value Officer at Crowell & Moring, similarly noted that clients are increasingly addressing AI through outside counsel guidelines, requests for proposal (RFPs), and governance surveys. Rather than imposing blanket prohibitions, many clients now permit AI use within defined parameters while requesting consultation before AI is used in higher-risk situations. She also observed that clients frequently ask what peer organizations are doing, reflecting an industry-wide effort to benchmark AI governance practices.”
  • “As Ashton Batchelor, Chief Innovation and Value Officer at Blank Rome, explained: ‘Innovation and AI governance aren’t mutually exclusive; they reinforce each other.’ Rather than trading confidentiality or quality for efficiency, clients increasingly expect firms to leverage AI responsibly while maintaining the same standards of legal excellence they have always demanded.”
  • “Bishai echoed that sentiment, explaining that clients are simultaneously focused on innovation, efficiency, confidentiality, security, and quality. She emphasized that enterprise-grade AI platforms, attorney training, and alignment among people, processes, and technology have become essential components of responsible AI adoption. Firms are also collaborating with clients by sharing lessons learned and helping develop best practices as both sides continue to integrate AI into legal work.”
    Attorney accountability emerged as another recurring theme. Asay noted that, regardless of technological advances, ‘Ultimately what they are paying for is our lawyers’ legal advice and judgment’ and that clients continue to expect attorneys to understand both the benefits and limitations of AI, independently verify AI-generated work, and remain personally responsible for the final legal product.”
  • “AI Governance Is Becoming Part of Outside Counsel Selection. As Asay put it, ‘It’s not looking ahead, it’s today.’ She explained that clients are already incorporating AI considerations into panel counsel selection, RFPs, outside counsel guidelines, and governance reviews. RFPs now often require firms to explain how AI will be used on specific matters, while clients are seeking greater transparency regarding governance policies, attorney supervision, approved technologies, and documentation surrounding AI use.”
  • “The industry leaders we spoke with also identified several emerging governance trends, including formal written AI governance frameworks, explicit supervisory responsibilities for attorneys overseeing AI-assisted work, documentation regarding when and how AI is used, and growing interest in standardized governance models that can be applied consistently across outside counsel relationships.”
  • “Batchelor compared AI governance to the evolution of cybersecurity requirements, observing that ‘AI governance is becoming as ubiquitous as information security and pricing in outside counsel engagements.’ While governance expectations continue to evolve, she expects greater convergence across the legal industry as clients and firms develop more consistent standards for responsible AI use.”

Rethinking Outside Counsel Guidelines for the AI Era: Ohio’s AI Ethics Guidelines as a Template for Legal Teams” —

  • “AI Is Now Embedded in Client Expectations. One of the most important developments goes beyond formal guidance. Clients now ask direct questions about AI use.They want to know whether their counsel uses AI, how it is governed, and what safeguards are in place to protect their data.”
  • “This demand has already reshaped outside counsel guidelines (OCGs). What began as simple disclosure language now includes detailed governance requirements, approved tool lists, and data retention expectations.”
  • “Prepare for client scrutiny be developing a clear AI usage policy. Align it with client expectations and industry norms, and be ready to explain how your approach improves efficiency and controls risk.”
  • “Firms that answer these questions confidently gain a competitive edge.”
  • “Governance Must Move Beyond Quick Fixes. AI governance is no longer a one-line policy update. It requires integration across the business.”
  • “Retention policies, discovery readiness, supplier management, and internal training all come into play. Even AI search histories may become discoverable in certain contexts, making documentation and retention decisions critical.”
  • “Teams must build a structured governance model:”
    • “Define retention rules for AI interactions”
    • “Align policies with discovery obligations.”
    • “Regularly review and update guidance as tools evolve.”
  • “Quick fixes will not hold up under scrutiny. Comprehensive governance will.”
  • “Ohio’s guidance does not break new ground. That is precisely its value. It confirms that responsible AI use in legal practice rests on familiar principles. Competence, confidentiality, supervision, and fair billing remain the foundation. The difference lies in how those principles apply when AI is involved.”
  • “Legal teams are empowered to use AI to improve efficiency and reduce cost. To do so, maintain rigorous oversight and ethical discipline and align practices with client expectations and evolving standards.”
  • “This approach strengthens defensibility, builds client trust, and creates a more consistent, scalable model for adopting AI with confidence.”

From permission to performance: What clients now expect from AI-enabled law firms” —

  • “We recently had the chance to talk with Chief Information Officer Skip Lohmeyer and Partner and Public Finance Attorney Carlos Manzano from Parker Poe about the rapidly evolving conversation about AI between in-house teams and outside counsel, and what that means for how firms operate and how clients select the right teams to hire.”
  • “Carlos Manzano: Two or three years ago, clients were mostly asking whether AI use was permissible… In 2026, that conversation has fundamentally shifted. Today, in-house legal teams are leveraging AI themselves to compress timelines, reduce routine work, and handle high volumes. Clients are benchmarking firms against their own operations and asking not whether their law firm uses AI, but what value outside counsel can actually deliver that their own capable teams cannot. The expectation has moved from permission to performance, and the firms that have not kept pace are starting to feel it.”
  • “What makes this shift particularly meaningful is the gap it has started to expose. The capabilities of generative AI tools have raised the floor for everyone providing legal services. The tools that felt like differentiators eighteen months ago are rapidly becoming baseline expectations. The more important competitive shift, though, is how AI empowers lawyers to raise the ceiling.”
  • “Skip Lohmeyer: Increasingly, clients view AI through the lens of risk management, operational efficiency, and business value. We see that reflected in conversations with clients, in RFPs, and in outside counsel guidelines.”
  • “Many clients are establishing expectations around confidentiality, data security, transparency, and attorney accountability when AI is used. At the same time, a growing number are asking different questions: where is AI improving efficiency and responsiveness, why would a law firm not use it responsibly, and how is it reducing legal costs?”
  • “What has not changed is accountability. Clients hire lawyers for judgment, experience, and trusted counsel. AI can help us work more efficiently, but it does not replace legal analysis or professional responsibility. We remain accountable for every work product we deliver and every recommendation we make.”
    “Skip Lohmeyer: We evaluate AI through three lenses: client value, risk management, and practical implementation. If a tool can help us deliver work more efficiently, provide deeper insight, or improve responsiveness while maintaining appropriate safeguards, we explore how to incorporate it into our workflows.”
  • “At the same time, we recognize that clients have different expectations and risk tolerances. Some clients are encouraging broader AI adoption. Others prefer tighter controls. We have built our governance and operational processes to support both.”
    “Carlos: Make governance a non-negotiable part of the evaluation as well. In-house counsel should understand whether the firm’s approved tools can train on client data, what security or privacy commitments apply, and who is ultimately accountable for AI-assisted work product before it reaches the client.”