Australian business leaders face constant pressure to move faster and cut costs. Generative artificial intelligence (AI) tools seem like the perfect solution, offering instant document drafting and quick analysis.
However, relying on AI for complex commercial transactions is a high-stakes gamble. While AI is excellent for routine administrative tasks, using it without human oversight introduces major liabilities for businesses.
The Danger of AI-Generated Legal Summaries
A rising trend amongst businesses is the uploading of formal legal advice from solicitors into AI tools to get a “quick summary” in an effort to rapidly progress transactions or negotiations.
Although the temptation is understandable the practice is risky. Formal legal advice is carefully drafted, with every word chosen to reflect specific risks. When AI compresses this advice, it routinely strips away crucial qualifications, conditions, and liability limits. Relying on these simplified, automated summaries means businesses are making critical decisions based on incomplete information, which can expose decisions makers such as directors to claims of breaching their duty of care and diligence.
The Trap of Self-Representation and AI Contract Reviews
Many businesses are now attempting to negotiate commercial leases, share sales, and corporate deeds without legal representation, relying instead on AI to review the contracts.
This approach is based on a fundamental misunderstanding of legal risk. AI is trained to analyse the words on the page, but it cannot identify what is missing or draw on recent experience of similar matters. An experienced solicitor calls on their lived in experience to look for hidden liabilities, poorly worded clauses or missing provisions that have been left out to your disadvantage.
The Missing Ingredients: Context, Strategy, and Expertise
Legal practice is more than assembling documents and requires strategic thinking and commercial context. AI tools do not understand your business’s risk appetite, your relationship with the other party, or your long-term goals.
An experienced solicitor knows how to use your commercial leverage to secure better terms, when to compromise, and how to draft bespoke clauses that protect you and minimise your exposure. AI cannot negotiate, read the room, or formulate a tailored strategy to protect your directors from personal liability.
Protect Your Business
There is no substitute for the strategic foresight, deep context, and personal accountability of a qualified legal professional. Do not leave important business decisions to an algorithm. Contact the experienced team at O’Sullivan Sneddon Law today at to secure tailored legal advice, comprehensive contract reviews, and robust risk management strategies designed to safeguard your commercial success.