California SB 574 Proposes New Regulations for AI Use in Legal Practice
The California legislature is nearing the end of its 2025 2026 session, set to conclude on August 31. Among the bills still under consideration is SB 574, which aims to amend the California Business and Professions Code to establish guidelines for attorneys and arbitrators using generative artificial intelligence.
This legislation addresses concerns related to inaccuracies in court documents, particularly hallucinated citations. While the bill contains provisions that encourage lawyers to verify information, correct errors, and refrain from using consumer grade tools for sensitive data, it also introduces a more restrictive rule that raises critical questions regarding the use of AI in legal practice.
The proposed legislation states, “An attorney shall not delegate the practice of law to generative artificial intelligence.” This broad prohibition differs from existing regulations, which typically allow for supervision of delegated tasks. The ambiguity surrounding terms such as “delegate” and “the practice of law” complicates the implications of this provision.
California courts have grappled with defining the practice of law for over a century. A historical case, People v. Merchants Protective Corp., provided a definition that includes legal advice, counsel, and the preparation of legal documents, regardless of whether they are pending in court. This lack of a clear definition continues to pose challenges, particularly for attorneys who may rely on non lawyer staff for various tasks.
The implications of SB 574 could significantly limit the ways in which lawyers can utilise generative AI. If enacted, the legislation may restrict lawyers to only clerical tasks, as the delineation between clerical work and the practice of law remains narrow. This raises questions about the feasibility of using AI for legal research, diligence reviews, or drafting client communications.
Furthermore, the regulation of attorneys is traditionally under the purview of the judiciary, with the California Rules of Professional Conduct issued by the Supreme Court of California. The intersection of AI use and attorney regulation presents a potential constitutional issue, as the legislative branch may be overstepping its bounds by imposing restrictions on AI in legal practice.
Should SB 574 pass in its current form, it could pose a significant challenge to the adoption and utilisation of AI tools within California, the most populous state in the United States. In response to these developments, the State Bar of California has been proactive, issuing guidance on the use of AI in legal practice, including considerations for charging clients and supervising AI systems.