Attorney Malpractice and AI: Tax and Estate Planning Case Study

• In Event: Taxes, Technology, and Regulation

Abstract

When it comes to technological innovations, the legal world is nearing a critical juncture. For centuries, there was an emphasis placed on pure intellect to achieve favorable client
outcomes. But as technological advances are occurring at a dizzying pace, the pendulum is quickly swinging in a different direction. Going forward, attorneys will have to learn how to
strategically harness technology and, in particular, AI into their practices lest they endure professional malpractice exposure.

The rippling effects of AI abound. There is no sanctuary from it, particularly in the legal profession. In yesteryear, attorneys could practice their trade with little or no technological intervention. Indeed, the most recent technological breakthroughs occurred nearly half a century ago in the early 1980s with the computer and the introduction of word processing, automated printers, and electronic research. 2 While these modernizations were monumental, they were truly limited in scope, resulting in the facilitation of document production and identification of authoritative information.

Fast forward to where we are today. Among other things, AI can now produce and automate routine tasks 3 and, at the same time, also engage in predictive analyses. 4 AI has the
capacity to transform the legal landscape and greatly improve client outcomes. Taking it one step further, if attorneys fail to employ AI or, alternatively, rely upon it too heavily, they risk producing subpar client outcomes. The goal should be to strike the right balance between AI use and mindful oversight.

This analysis argues that, for the reasons set forth below, in comparison to other areas of the law, such as landlord-tenant disputes and criminal adjudications, AI has the capacity to make some of its greatest contributions in the tax and estate planning realms. As such, the failure to capitalize upon or blind reliance on AI in these two interrelated legal disciplines is likely to result in heightened professional malpractice exposure.

This analysis argues that all tax professionals must thus familiarize themselves with AI utilization or endure unwelcome consequences. To make this case, the analysis first provides
critical background information. With this foundation, this analysis next examines what AI offers the legal profession and then how it specifically applies to the tax and estate planning fields. The analysis’s penultimate section discusses how AI will, as a result, transform the existing duty of care for malpractice determinations. Finally, the last section of the analysis concludes.

Author

• Jay Soled, Rutgers Business School