Generative Artificial intelligence (GenAI) has made many things more accessible, and legal work appears to be among them. Tools like ChatGPT and Gemini can generate contracts, draft correspondence, and produce legal research in seconds.

The output often looks polished, professional, and convincing. But looking right and being right are two very different things, and when it comes to the law, the gap between appearance and accuracy can be ruinously expensive.

Before you entrust your next commercial agreement, tax structure, or property transaction to a GenAI tool, consider what is actually at stake.

Illusion of Competence

GenAI does not understand law. It predicts the next most likely word in a sequence based on patterns absorbed from vast quantities of text. The result is output that sounds authoritative and reads fluently, but which may be entirely fabricated, legally outdated, or simply wrong for your jurisdiction.

GenAI rarely signals uncertainty. Rather than admit the limits of its knowledge, it will produce a confident answer even when that answer is baseless. It will invent case names, conjure statutory provisions that do not exist, and draft clauses that conflict with mandatory legislative requirements. For the non-lawyer user, these errors are virtually impossible to detect, because the output carries every hallmark of professional legal work except the one that matters most: reliability.

Experience and Expertise

A qualified lawyer does far more than assemble words on a page. Lawyers identify the questions that need asking, recognise the issues a client has not considered, and apply strategic judgement shaped by years of practice. GenAI cannot replicate any of this. It cannot assess commercial risk, weigh competing objectives, or tailor advice to your specific circumstances.

Consider a seemingly straightforward commercial lease. A lawyer will interrogate not only the terms on the page, but the regulatory context, the tax implications of the proposed structure, the client’s long-term strategy, and the enforceability of each provision under the relevant state or territory legislation.

GenAI has no capacity to ask probing questions, identify what it does not know, or exercise the kind of contextual judgement that prevents costly oversights. It will produce a document that appears complete while remaining dangerously incomplete.

With the right prompts, it is possible for the right GenAI tool to provide correct and appropriate advice; however, working out that input and being able to vet the output requires both technological and legal expertise.

The main GenAI tools used by the general public (ChatGPT, Gemini, Co-pilot) are general-purpose tools. Lawyers often have access to specialised tools (such as Harvey) and even then the right lawyer will know when to use Harvey versus a specific research tool, and when to use a combination of tools with the right prompts.

The Consequences of Getting It Wrong

The risks of relying on GenAI-generated legal work are not theoretical. They are well documented and growing at an alarming rate. There are individuals and even lawyers who have submitted documents to court with completely incorrect propositions and case law.

A legal researcher’s global database has now catalogued over 1,000 court decisions involving GenAI-generated hallucinations, with fabricated case law, false quotations, and misrepresented legal authorities appearing in jurisdictions across the world, including 73 cases in Australia alone.

There are examples of qualified lawyers who failed to verify GenAI output. For a layperson relying on GenAI without any legal training whatsoever, the risks are compounded exponentially.

We’ve seen examples of individuals drafting trust deeds via GenAI to save $1,000 or so – which resulted in potential double stamp duty which cost $100,000+.  There are messes that can often be fixed by the right lawyers, however the cost is exponentially more and sometimes structures or deals cannot be salvaged once the damage is done.  The gamble to save a few bucks is just not worth the reward!

No Safety Net

When a qualified solicitor provides advice that turns out to be wrong, the client has recourse. Lawyers in Australia are subject to professional regulation, bound by ethical obligations, and required to hold professional indemnity insurance. If something goes wrong, there is a framework for accountability and, where appropriate, compensation.

GenAI offers no such protection. If a chatbot produces a defective contract, incorrect tax advice, or a fatally flawed property document, the user bears the entire loss. The terms of service of every major GenAI platform expressly disclaim liability for the accuracy of their output. There is no regulator to complain to, no insurer standing behind the advice, and no professional obligation of care owed to the user. You are, in the most literal sense, on your own.

For businesses and individuals dealing with matters of genuine consequence, whether that is a commercial acquisition, a development site, a trust structure, or a regulatory obligation, this absence of any safety net is critical.

Keypoint Law’s Point of Difference

None of this means that GenAI has no place in legal practice. On the contrary, used properly, GenAI is a powerful tool for increasing efficiency, accelerating turnaround times, and reducing costs. The critical distinction lies in who is wielding the tool and how.

At Keypoint Law, we actively embrace technology to deliver better outcomes for our clients. Our firm was built from the ground up to operate without the overheads of a traditional practice, using modern technology to keep costs low and deliver genuine value.

When our lawyers use GenAI, they do so as trained professionals who can identify errors, verify accuracy, apply expert judgement, and ensure that the output is tailored to your specific commercial objectives and compliant with the law as it stands today.

GenAI allows us to review voluminous and complex documentation at a much faster pace, providing efficiencies and allowing review and advice at a scale that was once impossible due to commercial or practical time constraints.

In the hands of a qualified lawyer, GenAI is a tool for efficiency. In the hands of a layperson, it is a gamble with no safety net.

Our model combines the depth of expertise you would expect from a top-tier firm with the efficiency and value that technology enables, and it does so with full professional accountability and indemnity insurance standing behind every piece of advice.

The Bottom Line

The appeal of DIY legal work is understandable. GenAI makes it look easy, and the perceived cost saving is tempting. But the law is an area where the cost of getting it wrong vastly exceeds the cost of getting it right in the first place. A contract that is unenforceable, a structure that attracts unintended tax liabilities, or a transaction that falls foul of regulatory requirements can cost multiples of what proper legal advice would have cost at the outset.

The gold standard is not GenAI alone, nor a lawyer working without technology. It is the combination of both: cutting-edge tools guided by qualified human expertise, delivered with accountability and backed by professional indemnity protection.

Speak with one of our senior lawyers and experience what modern legal practice should look like: expert, efficient, technology-enabled, and always with a qualified professional in the loop.

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This article is for general information purposes only and does not constitute legal or professional advice.  It should not be used as a substitute for legal advice relating to your particular circumstances.  Please also note that the law may have changed since the date of this article.