David J. Volk, Esq.: Artificial Intelligence in Your Business – Great Promise, Real Peril
By David J. Volk, Esq. // June 4, 2026
AI tools can make your business faster, leaner and smarter. They can also get you into serious legal, ethical and Reputational trouble
“A fool with a tool is still a fool.” – Grady Booch, Software Engineer
Artificial intelligence is everywhere right now. You cannot open a business publication, attend a chamber luncheon, or sit through a bar seminar without someone telling you that AI will either save your business or destroy it.
The truth, as usual, is more nuanced and more interesting.
AI tools can make your business faster, leaner, and smarter. They can also get you into serious legal, ethical, and reputational trouble if you rush in without thinking.
I have seen smart, capable businesspeople stumble with new technology because they treated it as a magic wand rather than a powerful instrument that demands care and judgment. AI is no different.
Let’s talk about how to use it carefully.
What AI Can Actually Do for Your Business
Before we talk about guardrails, let’s be honest about the upside. AI tools today can:
■ Draft documents and communications – Letters, proposals, contracts, marketing copy, job descriptions, and more. AI is a capable first-draft machine.
■ Analyze data – AI can spot patterns in your sales figures, customer behavior, and operational metrics far faster than a human reviewing spreadsheets.
■ Handle customer interactions – Chatbots and AI assistants can answer common questions around the clock, freeing your team for work that requires real human judgment.
■ Research – Legal research, market research, competitor analysis. AI can synthesize enormous amounts of information quickly.
■ Automate repetitive tasks – Scheduling, invoicing, follow-ups, data entry. The boring but necessary work that eats time.
The promise is real. But so are the hazards.
The Hazards You Cannot Ignore
1. AI Makes Confident Mistakes
This is the most important thing to understand. AI systems, even the best ones available today, can produce output that sounds completely authoritative and is completely wrong. The technical term is “hallucination.”
In plain English: the AI makes things up and presents the made-up information as fact. Careless lawyers are increasingly endangered if they do not have clear rules for the use of AI.
AI-generated legal papers can cite court cases as legal authority that do not exist. Lawyers have been sanctioned for filing legal arguments that contained AI-fabricated case citations.
I ran across a website that collects lawyer sanctions data. As of last week, it showed nearly 1,600 sanctions against lawyers for misuse of AI.
And, at times, the law firm the careless lawyer works for is called in to stand tall before the man and explain its culpability and internal processes to avoid false statements generated by AI research or fact-finding.
THE LESSON: Verify everything AI tells you that matters. Every fact. Every citation. Every figure. AI is a research assistant, not a research authority.
2. Confidentiality Risks Are Real
When you type sensitive information into an AI tool, such as client names, financial data, proprietary business strategies, and personnel matters, where does that information go? It depends entirely on the platform.
Many AI tools, by default, use your inputs to improve their models. That means your confidential information may not stay confidential.
For professionals bound by confidentiality obligations, attorneys, accountants, healthcare providers, financial advisors, engineers, and other vendors, this is not a minor concern. It is a potential ethics and liability problem.
THE LESSON: Read the terms of service before you type anything sensitive into any AI tool. Use enterprise-grade platforms with appropriate data protection agreements if you handle confidential client or customer information.
3. AI Can Encode Bias
AI systems learn from data. If that data reflects historical biases in hiring, lending, pricing, or customer service, the AI will faithfully reproduce those biases and sometimes amplify them.
A business that uses AI to screen job applicants or approve credit applications may be engaging in discriminatory practices without any discriminatory intent. Like I was told, learning to program in Fortran using punch cards while in college, garbage in, garbage out.
The law does not generally care about intent. If your AI-powered hiring tool disproportionately screens out applicants of a particular race, gender, or age group, you may have an employment discrimination problem regardless of whether you knew it was happening.
THE LESSON: Audit your AI tools for disparate impact. Understand the data they were trained on. Do not let “the algorithm decided” become a shield against accountability.
4. Your Work Product May Not Be Yours
Intellectual property law is racing to catch up with AI, but it has not yet. Copyright protection may not extend to works created entirely by AI without meaningful human authorship. May? That is the huge problem.
The legal system is struggling to define new rules for the new technology. Inconsistent court results are occurring. Just another reason to be careful. There are also questions about whether AI-generated content infringes on the copyrighted works the AI was trained on.
THE LESSON: Involve human creativity and judgment in your AI-assisted work product. Use AI as a collaborator, not a replacement for human authorship.
5. Overdependence Erodes Capability
Here is a subtler risk that doesn’t get enough attention. If your team outsources its thinking to AI tools, those skills atrophy.
The greenhorn who never learns to research without AI doesn’t develop the judgment to know when the AI output is wrong.
The salesperson who never writes a proposal without AI assistance never develops the persuasive instincts that make great salespeople. The manager who never drafts a difficult communication without AI loses the human empathy muscle that good management requires.
THE LESSON: Use AI to augment human capability, not replace it. Your people should be in charge of AI, not dependent on it.
A Framework for Careful AI Use
Getting the most out of AI while protecting your business requires some structure. Consider building these practices into your operations:
1. Develop a written AI use policy for your organization. Address what tools are approved, what information may and may not be entered into AI systems, and what quality-review processes are required for AI-generated work.
2. Assign a point person, call them your AI watchdog, thug, or benevolent despot who stays current on AI capabilities, limitations, and the evolving legal landscape around AI use so that they can police usage.
3. Treat AI output as a first draft, not a final product. Every significant AI-generated work product should have a human review it against the standard of: Is this accurate? Is this appropriate? Is this really what we want to say?
4. Start with low-risk applications and earn your way toward higher-stakes ones. Use AI for internal drafts and research before you use it for client-facing communications or compliance-sensitive functions.
5. Train your team — not just on how to use AI tools, but on their limitations. The most dangerous user is the one who trusts AI completely.
The Bottom Line
AI is a powerful tool. Like all powerful tools, it can do great work in skilled hands and cause real damage in unskilled or inattentive ones.
The businesses that will benefit most from AI are the ones that approach it with curiosity, discipline, and appropriate humility about what AI can and cannot do.
The businesses that will get hurt are the ones that rush in, trust blindly, and find out too late that the confident-sounding output was wrong, confidential information was exposed, or a legal obligation was violated.
Go forward. Embrace the technology. But go carefully.
