KPMG Legal Reimagined Nordic and Baltic’s Newsletter

This is a newsletter issued by the KPMG Legal Reimagined Nordic and Baltic Group, a collaborative initiative since 2021 with the aim to revolutionize the legal landscape within our region. 

The importance of Artificial Intelligence (“AI”) and the disruptive impact it will have to numerous business areas, including legal, can hardly have gone unnoticed by anyone. AI systems, which can include software and sometimes hardware, collect, analyse, and use data to meet complex goals. Generative AI is a kind of AI that can create new things, like text or even whole virtual worlds. It does this by studying patterns in existing data. Large Language Models (“LLMs”) are a good example of this, using complex math and learning techniques to make new, believable content.

For legal professionals, understanding the benefits and possibilities of using AI meanwhile acknowledging potential risks and related regulations, will be key.

The upcoming EU AI Act sorts AI systems by how risky they are, highlighting how crucial it is to make sure data is safe, especially in AI systems that could pose big risks. On December 8th, the Parliament and Council negotiators reached a provisional agreement on the AI Act. In brief, the legislation prohibits certain AI applications, such as biometric categorization systems and emotion recognition in workplaces, while providing law enforcement exemptions under strict conditions. 

The rules also impose obligations on high-risk AI systems, including fundamental rights impact assessments, and aim to support innovation by promoting regulatory sandboxes and real-world testing, with potential fines for non-compliance of the rules ranging from 35 million euro or 7% of global turnover to 7.5 million or 1.5 % of turnover, depending on the infringement and company size. 

You may have tried and tested LLM’s like Open AI’s Chat GPT. Typically, an AI system such as Chat GPT will generate answers based on the users prompts (i.e. the user asking questions or telling the system what they would like it to do). This triggers questions around the security and reliance of the data that the AI system base it answers on (and learn from), as well as the data being fed to the AI system when the user prompts it. 

In this regard, it will be important for users to understand how providers of AI systems comply with data policies, ensuring safety and care of data, while also considering internal rules and policies around the use of data and AI systems. If not exercised with caution, there is a risk that confidential information could be leaked through the questions and answers processed by language models.

To mitigate these risks, the use of AI systems should be facilitated in a secure place, to make sure sensitive information is not leaked or wrongfully accessed. This can include encrypting messages and taking precautionary measures about how data is stored and used in the AI system.

KPMG is committed to helping businesses navigate the complex world of AI. We offer expert analysis to identify the best AI solutions for our clients tailored to your unique needs, meanwhile considering all aspects of implementing AI, including the security, safety and reliance of data. 

Furthermore, our partnership with Microsoft (read more), a leader in cloud computing services, enables us to offer cutting-edge AI technologies and insights, ensuring that your legal function and company is well-equipped for the future.

If you are interested in exploring the opportunities with AI for legal, or wish to discuss concerns or questions you may have, please feel free to reach out to us. Last but not least, we wish you all a very Merry Christmas and Happy New Year! 

Don't forget to sign up for the Save the date of our event The New Era of Legal. The location for the 2024 event will be the KPMG House in Helsinki, Finland.

Plan to join us on March 21, 2024 for what promises to be an insightful, informative and inspiring look into the latest trends, strategies and future of in-house legal functions. The event will bring together thought leaders and innovators from market-leading technology companies, top legal professionals and KPMG expert speakers.

• Keynote address: gain valuable insights from industry experts on the current state and future trends of technology solutions.
• Discussions: engage in insightful discussions with legal professionals and leaders as they share their experiences and strategies for successful legal transformation.
• Networking: connect with like-minded professionals, build valuable relationships, and exchange ideas.

You are warmly invited, so make sure to save the date! Registration is open and a more detailed program will follow in due time.

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