Can AI replace my lawyer?

Written By: Martin Richardson Legal Director, Risk Collective

For recruiters, the prospect of dealing with lengthy legal documents is unwelcome. The thought of paying a lawyer thousands of dollars without knowing precisely what you'll end up with also highlights the allure of AI-powered contracts.

AI promises to simplify business processes, and legal document creation is no exception.

These platforms can analyse existing legal documents, understand standard clauses, and generate new contracts based on user input.

Why Embrace AI for Contracts?

Several compelling reasons might lead a recruitment agency to explore using AI for drafting legal contracts:

• Cost Savings: Hiring a lawyer can be a significant expense

• Speed and Efficiency: Time is money in recruitment

• Accessibility and Convenience: AI tools don’t require legal backgrounds.

The Legal Risks of Relying Solely on AI-Generated Legal Documents

Relying solely on AI-generated legal documents carries significant risks that agencies must consider:

• Potential for Errors: Errors the underlying data or flaws in the algorithms could lead to mistakes or omissions in the generated legal documents. Relying on such errors could have serious consequences.

• Lack of Context: AI lacks the deep understanding of the specific legal requirements and market nuances that apply to your agency.

• Inadequate Protection: AI tools may not be equipped to anticipate potential risks and liabilities specific to your agency or the particular use case.

• Failure to Comply with Local Laws: Employment contracts in Australia have specific requirements regarding minimum wage, leave entitlements, and termination procedures that a generic AI might overlook, alongside recruitment-specific risks such as commission structures and client poaching Client terms may need to comply with unfair contract terms laws where non-compliance penalties are significant.

The 90%

Creating recruitment-specific and accurate legal documents is only 10% of the service I provide.

Consider whether the remaining 90% is worth the investment:

• Collaboration and Training: An AI tool can generate a document, but it cannot provide legal advice or guide you through the process of creating legal documents This process is invaluable because:

Truly understanding your legal terms means you can explain and negotiate them effectively.

Tailored training means team buy in.

• Market Knowledge: Your clients engage you because you are talking to candidates they want, and everyone else wants.

• Working with a lawyer who understands recruitment should be viewed in the same way – they are constantly observing what works and what changes are occurring

• Support: I can't speak for other legal professionals, but I will probably decline support for a document produced by AI. This isn’t ego or hurt feelings, but because the investment needed by the agency always outweighs the benefit of starting again with effective and compliant terms. You should also consider where this expert help might come from if you get in trouble, and what it might cost.

A Pragmatic Lawyer’s Take

When AI tools offer access to free legal documents, it's easy to forget that what costs nothing may also be of little value until a costly mistake proves otherwise.

I recommend that recruiters combine the efficiency of AI with the critical oversight of a lawyer who understands recruitment.

This way, you will still be best placed in 2025 to mitigate key risks and ensure your legal documents are robust, legally sound, and tailored to your specific needs.