How to scale AI without scaling risk

CHRIS WADA

AI is the biggest compliance risk professional firms have ever faced. It operates at a scale no human can match, so firms struggle to monitor it properly, and mistakes slip through the cracks.

If a professional inadvertently violates a compliance rule or access policy, the error is containable and you can course-correct. But say a firm rolls out agentic AI to help lawyers with research and drafting, giving it broad access to firm systems instead of scoping to each user’s permissions. Lawyers will receive information drawn from matters they were never supposed to see — and because the AI treats every request the same way, access violations will pile up quickly before anyone even notices. Unwinding that, and understanding how far the compliance breach goes, will require a massive amount of resources.

To prevent this from happening, firms should hold AI coworkers to the same standards as professionals. They need to create governance frameworks that help them understand what AI coworkers are doing, how they’re performing, what data they’re accessing, and if their actions are compliant.

The challenge is that compliance risk isn’t static. AI coworkers are constantly accessing and acting on data, while conflicts, related information barriers, and other risk factors can change at any moment.

Because of this, firms need a framework that can enforce compliance for every AI action across every tool. It should provide complete auditability so firms can show exactly what the AI did and when.

Firms should also assess their workflows, defining the areas where AI can autonomously execute work, and where they need a human in the loop to mitigate exposure.

Firm AI makes all of this possible by embedding a firm’s compliance rules, access policies, and controls at the infrastructure level. All AI actions performed by all tools are governed, auditable, and reviewed by a human when needed so firms can scale AI without scaling their compliance risk.

Chris wada

Because to enforce compliance, AI tools need to understand the relationships between professionals, clients, firm policies, and deals, matters, or engagements — and generic tools simply aren’t capable of this.

For example, accurately executing conflicts checks requires understanding not only who’s worked with whom, but also the nature of those relationships and how they intersect with firm policies, prior engagements, ownership interests, and ethical walls.

Take lateral hires. When a partner joins your law firm, they bring years of client relationships with them — and every one of those relationships is a potential conflict your firm has to evaluate.

A generic AI conflicts tool simply doesn’t have all of the data and context needed to accurately assess each relationship. It might be able to find overlapping clients by matching client names. However, it won’t understand that your new hire was exposed to confidential strategy and negotiating positions that could compromise your current matters and create risk.

Because of this, there’s no way to retrofit compliance controls that meet the needs of professional firms.

Tools with Firm AI, on the other hand, fully understand the context of firmwide data and the complex relationships professional firms navigate daily. Compliance rules are embedded at the infrastructure level, so when AI coworkers take on work for conflicts checks or client onboarding, it’s performed accurately and compliantly.

Chris wada

When evaluating AI tools, firms should look beyond broad claims and ask vendors whether their tools prevent prohibited behavior or just report on it. Compliance tools in particular often focus on managing the compliance process itself, or on generating reports that demonstrate that the process was followed. While these capabilities are important, highly regulated professional firms require AI enforcement that prevent compliance violations by actively enforcing their ethical walls and rules.

As clients start to adopt AI, it’s becoming far more important to enforce policies as AI agents often run continuously and at higher volume. Our compliance controls are applied in real time to every AI action, ensuring that AI coworkers only access and act on information they’re authorized to use.

This is a much harder thing to do than creating a generic compliance workflow, and it’s exactly what Firm AI is built for — which is why many professional firms are moving away from generic tools and towards tools with Firm AI.

CHRIS WADA

Today, processing intake requests often takes weeks because professionals and compliance teams are continually going back and forth to gather missing information and validate data.

Firm AI cuts request processing down to just hours by eliminating the time-consuming manual interactions that typically slow it down. AI coworkers automatically extract information shared by professionals to populate new intake requests, prompt professionals to fill in any gaps, then validate that everything is complete and ready to submit to the compliance team.

Firms can further accelerate processing — and reduce the compliance team’s workload — by automatically processing low-risk matters or engagements under a certain dollar value without any human intervention, and routing only those matters that are complex or high-value to professionals for review.

Firm AI also significantly speeds up conflicts clearance. Compliance teams today spend a lot of time constructing search strategies, filtering and reviewing results, and determining whether a matter can be cleared. With Firm AI, AI coworkers can perform the searches, analyze the results against the firm’s data and past decisions, then provide a high-confidence recommendation on which results should be escalated for further review.

Another important way Firm AI adds value is by helping firms determine not just if they can take on business, but whether they should take on business — there’s a big difference. For instance, a firm might easily be able to take on a new client, but if they don’t understand all the potential risks involved up front, they might discover six months later that they made a huge mistake. Firm AI can analyze financial data and other intelligence to help firms get a clear understanding of whether potential new business makes sense strategically.

chris wada

Many firms mistakenly think that Firm AI learns from their proprietary data or exposes confidential information. This misconception often creates uncertainty around whether Firm AI can meet the firm’s security, governance, and compliance requirements.

In reality, Firm AI keeps firmwide data secure, governed, and under the firm’s control at all times.

When we have the opportunity to educate firms on how Firm AI works, the conversation typically shifts from “Can we trust it?” to “How quickly can we scale it?”