Navigating the cross-border impact of GenAI: An Australian legal perspective

As a practising international lawyer and professor of management practice in business law at ESSEC Business School, which conducts research and education on AI governance and ethics, I have observed firsthand how generative AI tools are transforming legal workflows by enhancing efficiency and client service while simultaneously raising important regulatory and ethical challenges that demand careful professional management.

Generative AI systems, which create original content based on vast data sets, differ significantly from traditional legal technologies. Rather than simply locating information, they draft contracts, summarise complex case law, translate documents, and predict litigation outcomes.

For Australian lawyers dealing with multi-jurisdictional matters, these capabilities provide a considerable competitive advantage, enabling faster, more accurate analysis of contracts and regulations across different countries.

In my cross-border legal practice, AI has significantly reduced the manual effort involved in document review. For example, during international mergers and acquisitions, AI platforms rapidly highlight jurisdiction-specific risks and compliance requirements, saving countless hours and reducing human error.

Additionally, real-time regulatory monitoring powered by AI helps firms ensure ongoing compliance with constantly evolving data protection laws worldwide, such as the European Union’s General Data Protection Regulation (GDPR).

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However, alongside these opportunities come complex challenges, notably regarding data privacy and security. AI platforms operating across borders must comply with divergent international privacy laws.

Australian firms must be vigilant, ensuring their AI providers meet stringent standards like the General Data Protection Regulation (GDPR), possibly through data localisation or anonymisation strategies. Failure to manage these risks can lead to severe regulatory penalties and damage client trust.

Moreover, regulatory frameworks like the European Union’s Artificial Intelligence Act (AI Act) introduce additional layers of complexity. Australian lawyers advising clients with European interests or using EU-based AI services must be aware that the AI Act:

• Prohibits specific high-risk AI systems (e.g., social scoring, biometric identification in public spaces) effective from February 2025.
• Imposes strict compliance obligations on high-risk AI systems (such as those used in employment, credit scoring, or critical infrastructure) starting August 2026, including conformity assessments, documentation, and human oversight.
• Requires transparency measures for AI-generated content (e.g., chatbots, synthetic media).
• Extends its scope extraterritorially to AI providers outside the EU if their systems are used within the EU.

Australian lawyers must ensure that clients understand these requirements, conduct risk assessments, and implement compliance strategies to avoid significant penalties.

Ethical and professional obligations must remain central when integrating AI into legal practice.

I strongly advocate for ongoing education and the implementation of AI compliance monitoring tools as practical solutions to mitigate regulatory uncertainty.

While generative AI enhances efficiency, lawyers’ fundamental responsibilities remain unchanged, such as maintaining client confidentiality, providing competent advice, and exercising sound professional judgement.

Maintaining transparency with clients regarding the use and limitations of AI-generated advice is essential.

From my experience, several best practices can help Australian firms navigate the integration of generative AI effectively.

First, start with controlled pilot projects, such as contract reviews limited to a specific jurisdiction.

This allows firms to assess AI capabilities and limitations practically. Second, invest in robust data governance strategies, partnering closely with IT and compliance departments to protect sensitive cross-border data through encryption and strict access controls.

Furthermore, continuous training for legal teams on using AI tools and the nuances of international regulatory compliance is critical. AI technology evolves rapidly; ongoing education ensures that lawyers remain effective and compliant.

Lastly, a strong layer of human oversight must always be maintained.

AI-generated insights should augment-not replace-the nuanced legal analysis experienced practitioners provide, particularly when dealing with varying legal systems and client expectations.

Generative AI is not merely another technological advancement but is reshaping how legal services are delivered globally.

For Australian legal practitioners, strategically adopting these powerful tools and diligently managing regulatory and ethical risks will enhance international competitiveness and provide more efficient, compliant, and client-centric services across borders.

Bamdad Shams is a professor of management practice in business law at ESSEC Business School and a lawyer at the Paris Bar.

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