North Carolina's 2024 Formal Ethics Opinion 1 offers crucial guidance on AI in legal practice. For solo and small firm attorneys, this framework helps navigate ethical boundaries while leveraging AI's efficiency benefits in tasks like legal research and document drafting. The opinion also warns of AI's tendency to generate convincing but inaccurate information.

Small firm practitioners lack the dedicated ethics committees and IT departments of larger firms, placing the full weight of compliance on individual attorneys. This opinion provides a way for meeting these obligations without extensive technical expertise, allowing small practices to adopt AI tools confidently while protecting clients.

Rule 1.6(c) requires attorneys to make reasonable efforts to prevent unauthorized disclosure of client information—a critical concern when using AI tools:

• Understand the privacy implications: Most publicly available AI tools (like ChatGPT) retain user inputs for training purposes, potentially exposing confidential information.
• Clearbrief's Security Features: With SOC 2, Type 2 certification and robust data hygiene controls, Clearbrief helps small firm attorneys comply with Rule 1.6(c) by protecting client data during document processing. When you upload sensitive discovery materials or case filings, you can trust your ethical obligations are being met through enterprise-grade security.
• Vetting third-party providers: Before sharing any client information with an AI service, carefully evaluate:
  • The company's reputation and stability
  • Security measures and certifications
  • Data handling policies, including retention and destruction
  • Whether they claim ownership of uploaded content
• Special caution with public AI tools: Generally avoid inputting client-specific information into publicly available AI resources like ChatGPT, as their data retention policies may create confidentiality risks.
• Create clear written policies: Document how your North Carolina firm handles client information when using AI to demonstrate compliance with ethical obligations.

AI can dramatically reduce time spent on certain tasks, raising important billing considerations:

• Bill for time actually spent: If AI reduces a three-hour drafting task to one hour at $300/hour, you cannot ethically bill for the three hours the task traditionally represented.
• Acceptable flat fee approaches: Consider implementing flat fees for AI-assisted work, clearly communicating the fee structure to clients upfront.
• Transparent AI-related expenses: If you incur specific costs using AI tools for a client matter, these can be billed as expenses with client consent, preferably documented in writing.
• Sample billing language: "Review and analysis of discovery documents using AI-assisted review software (1.2 hours); client-approved AI processing fee ($X)."
• Exclude learning time: Don't bill clients for time spent learning to use AI tools or correcting AI-generated errors.

Whether using AI tools in-house or through external providers, security remains paramount:

• In-house is not inherently more secure: Local servers may actually be more vulnerable than cloud-based systems with enterprise-grade security.
• Consult IT experts for implementation: North Carolina small firms should engage qualified IT professionals to evaluate security measures for any AI implementation.
• Cost-effective security measures: Even with limited resources, implement strong password policies, multi-factor authentication, and regular security training.
• Watch for these common vulnerabilities: Outdated software, unsecured networks, and lack of access controls often create the greatest risks.
• Benefits of certified AI tools: Products like Clearbrief with SOC 2 certification have undergone rigorous security assessments, providing an extra layer of protection for small practices.