Page 18 - Spring 2025

how laws are wri�en, interpreted, and applied. The laws of two states lack of access to certain resources could result in problema�c gaps in
may not govern a single ma�er in the same way. Different courts within the AI’s knowledge. While a lack of knowledge is troublesome enough,
a given state may issue contradictory opinions regarding the same issue. AI may fill these gaps with false informa�on. In fact, this recently
An administra�ve agency may interpret a law dis�nctly from how a happened to one New York a�orney who is currently facing poten�al
United States District Court might. While AI may be able to iden�fy sanc�ons for filing an AI-generated brief containing cita�ons to fake
differences in text, AI cannot employ reasoning and judgment in cases. That a�orney informed the court that he was “unaware that
interpre�ng and applying the law to a specific set of facts as an a�orney [ChatGPT’s] content could be false.”[1]
might. This, in turn, invites error in AI-generated legal documents.
Finally, to be effec�ve, some legal documents require addi�onal human
As an example, a user may live in a state with laws very favorable to ac�on. For example, in a majority of states, at least two witnesses must
landlords. If the user—a landlord—requests that AI prepare a lease be present to observe a testator’s signature of a will to ensure
agreement with “standard terms” for property being leased in a second authen�city and to confirm the testator’s inten�ons. While this issue has
state, the AI-generated lease may contain terms that comply with the not yet been addressed, AI almost certainly will not qualify as a witness;
laws of the user’s state, but violate the laws of the second state, which AI is currently incapable of fulfilling that role due, in part, to a lack of
may have laws more favorable to tenants. percep�on and conceptual reasoning. The intended heirs of testators
who do not secure witnesses may later discover that they will not
To further illustrate this point, consider a user who requests that AI actually inherit what was promised them.
generate a company �mekeeping and over�me policy. Based on the
user’s direc�on, the AI generates a policy that states employees may Certain AI systems may be free, but they are no subs�tute for an
only clock in during their scheduled shi� and that employees are to be a�orney. While some may be tempted to take advantage of AI-
paid for all on-the-clock work. Assume that some employees regularly generated legal documents, such documents could end up cos�ng much
perform work outside of their scheduled shi� at their manager’s more than the amount which would have ini�ally been spent in
request, however. Pursuant to the company policy, these employees a�orneys’ fees. If the ease of AI s�ll seems an a�rac�ve alterna�ve for
would not be paid for that work. Facially, nothing might appear to be document prepara�on, users should, at minimum, retain an a�orney to
wrong with the AI-generated policy, but the manner that the company conduct a review of AI-generated legal documents. AI may be
policy is implemented will almost certainly result in a lawsuit. impressive, but it will forever lack the human touch.
_________________
At this early stage, it is doub�ul that AI can adequately perform due [1] Kathryn Armstrong, ChatGPT: US lawyer admits using AI for case
diligence. AI may be unable to access some court documents, cases, and research, BBC News, h�ps://www.bbc.com/news/world-us-canada-
other legal resources, including resources which are not electronically 65735769.
stored or are locked away behind paywalls. Companies that control __________________
certain legal resources, such as Westlaw and LexisNexis, have li�le
incen�ve to provide outside AI with access to these resources. While AI S. Ka�e Calvert is a li�ga�on a�orney at Qua�lebaum, Grooms & Tull
may be able to quickly process a staggering amount of informa�on, the PLLC, an ACB Preferred Solu�ons Provider.

Arkansas Community Bankers - One Vision, One Mission. Community Banks

Con�nued from
Tariffs have increased uncertainty in financial markets, which could
Page 6
con�nue for months as the Fed maintains its monetary policy, said Bill
consump�on expenditures, excluding food and energy, could rise to 4% Zox, a por�olio manager at Brandywine Global.
by the fourth quarter due to tariffs, up from 2.6% in March, BMO's
Anderson said. "If the financial markets don't push for more clarity, it could take some
�me to flesh out the tariffs and the impact on the real economy," Zox
said. "If a recession becomes imminent, the Fed may be late and may
have to catch up with large rate cuts."
____________________

Brian Scheid is a New York-based senior reporter, global markets with
S&P Global Market Intelligence covering financial markets, monetary
policy and US macroeconomics.S&P Global market Intelligence is an ACB
Preferred Solu�ons Provider.

Arkansas Community Banker | 18 | Spring