Gartner, a research firm, has identified six potential legal or compliance risks that enterprise organizations may face when using large language models (LLMs) such as ChatGPT. If companies do not take the necessary precautions, they risk facing legal, reputational, and financial consequences. Some of the risks that organizations should consider include the possibility of fabricated and inaccurate answers, data privacy and confidentiality issues, model and output bias, intellectual property and copyright risks, cyber fraud risks, and consumer protection risks. These risks can be mitigated by establishing the necessary guardrails and controls to ensure that these tools are being used responsibly.
ChatGPT, a generative AI that produces written output, is known for producing both convincing and potentially incorrect information. Gartner advises that companies ask their employees to review any output produced by ChatGPT for accuracy, appropriateness, and actual usefulness before being accepted. ChatGPT may also incorporate sensitive, proprietary, or confidential information into responses generated for users outside the enterprise. Legal and compliance leaders need to establish a compliance framework and clearly state that it is prohibited to enter any sensitive organizational or personal data into public LLM tools.
It is also important to note that intellectual property and copyright risks are linked to using ChatGPT, as its training dataset is based on internet data, which, by nature, contains copyrighted material. Therefore, its outputs run the risk of violating copyright or IP protections. Also, cyber fraud risks are associated with ChatGPT, as bad actors are already misusing the tool to generate false information at scale. Finally, these tools additionally represent the possibility of consumer protection risks.
Gartner is a global research and advisory firm that offers guidance on technology, market and supply chain management, talent management, finance, legal support, and more to help companies achieve their goals.
Ron Friedmann is a senior director analyst at Gartner’s Legal & Compliance Practice. His role involves providing insight and guidance to counsel clients to navigate the rapidly changing legal market and to help them align the use of technology with their business objectives.
