New technology is designed to solve age-old problems — yet, perhaps inadvertently, one downside to advancement is the entirely new problems it can create.
Artificial intelligence is proving to be no different in that mixed-blessings department.
“I think the perception is that AI can supplement or, in some cases, supplant human power, so it is OK to require more in every facet of business,” said Carrie S. Ihrig Freeman, attorney and owner of Grua, Freeman, Tupper and Young PLC. “Information is shared so easily and in large quantities, and the course we are on is to use it to make changes to make things better and make more money.
“But sometimes it’s just … more trouble,” she added. “It doesn’t always simplify or alleviate a burden.”
While Freeman called AI “fantastic in helping people better grasp basic legal concepts and ideas and brainstorm,” it’s not so great in the role of an actual robo-lawyer.
“I find I often have to debunk the AI research given to me by clients,” she said. “AI doesn’t appear to interpret or apply case law accurately. It doesn’t filter or edit the information into a trustworthy opinion for a client. There is still no substitute for actual hands-on personal legal advice.
“It is so important that you have a local attorney who works in that particular area of the law to filter what really matters and applies to your situation, and to give you that professional ‘diagnosis,’ so to speak,” she continued.
DIGITAL TOOLS FUEL DEED FRAUD
AI isn’t the only way tech can make life better or worse. Digital tools can enable the growing problem of deed fraud, where property is illegitimately sold through fraudulent documents.
“The more we move toward remote closings, acceptance of e-signatures, little to no in- person connection between the buyers and sellers, and people trying to save money by using AI for legal advice instead of a lawyer, the more susceptible we are to fraud,” Freeman warned. “It is important that people be more diligent when there are quitclaim deeds, as opposed to warranty deeds, in the chain of title and when a quitclaim deed is being offered to transfer title.”
At the very least, Freeman said, it is imperative that a person transact the sale through a reputable and established title company that will conduct due diligence and provide any necessary insurance coverage.
“I always recommend that you have an attorney review the title work and closing documents as well, even if you are familiar with real estate transactions” she said. “Lawyers are trained to look for issues. Often, employing a lawyer to work with you on a closing is very reasonable and can be invaluable.”
TECH CAN SIMPLIFY LEGAL COMPLIANCE
Despite such troubles, tech really can help in many instances. A case in point revolves around the Michigan Earned Sick Time Act, which expanded sick leave for employees of smaller businesses, along with recordkeeping changes that can be significant, according to Freeman.
“This is where AI could be a great tool to create a program that could simplify and streamline recordkeeping and information-providing processes that small businesses have to employ in order to be compliant with ESTA,” she said.
NEW LAWS MEAN NEW RULES
Sometimes, solutions to tech-enabled problems can result in new challenges. An example Freeman cited is the Financial Crimes Enforcement Network, an agency within the U.S. Department of Treasury that fights financial crimes.
“In the past couple of years, they have tried to put certain, in my opinion, tedious reporting requirements on business owners,” she said. “They wanted business owners to provide significant personal information about all owners, and even those who aren’t owners but just key employees.
“I assume most of us want to support the fight against financial crimes, but the reality was that people who are likely not the problem were being forced to provide personal information on themselves and their employees to the government,” she continued.
Legal challenges have some registration mandates for businesses and reporting requirements for real estate actions on hold, Freeman said.
‘NO SUBSTITUTE’ FOR PERSONAL CONNECTIONS
The bottom line: Small businesses need to become aware and stay aware of the problems and solutions that new tech and related laws bring to entrepreneurship.
“As to AI, people need to remember that everything you read on the internet is not true,” Freeman said. “Look at the sources that the AI is relying on. Don’t be so quick to defer to and trust the computer’s knowledge over a human professional’s. There is no substitute for face-to-face personal connections in business for so many reasons.”
Omar Sofradzija
Omar Sofradzija was a newspaper reporter, college media adviser and journalism instructor at Michigan State University. He is now a digital marketing content specialist and freelance writer. He is a regular contributor of feature profiles to 517 Business.
