AI Governance: What General Counsels Should be Thinking About

A recent Squire Patton Boggs memo addresses key AI governance issues that GCs and law departments should consider revisiting as a result of the rapid development of AI technology. Here’s an excerpt from the memo’s discussion of agentic AI:

AI agents, or agentic AI, refers to AI systems that autonomously execute multiple steps with minimal human involvement.

– They represent a shift in AI use from “answer generators” to workflow actors that can analyze contracts, triage customer service requests, update records, prepare first drafts, engage in commerce and execute similar multistep processes – raising new questions around authority, supervision, auditability and privilege.

– Agents can use tools, access data and take actions on behalf of employees or customers. Unlike stand-alone chatbots, agents may connect to email, calendars, customer relationship management (CRM), HR information systems (HRIS), ticketing, procurement, code repositories and document systems, creating legal risk around access controls, scope of authority, cybersecurity, vendor management, consent, data minimization, and misuse of confidential information.

– Agentic systems create a new governance challenge: delegation without clear accountability. As AI agents become capable of making recommendations, initiating communications, negotiating terms, escalating issues or triggering transactions, GCs will need policies defining permissible uses, human-in-the-loop requirements, logging, testing, and responsibility for errors or unauthorized actions.

The memo highlights the fact that major insurers are moving to exclude from coverage losses caused by AI agents from coverage, and encourages companies to consult with their insurance brokers to understand the extent of their coverage for AI agents.

Other topics addressed in the memo include third-party and SaaS vendor AI risk,, AI litigation risk, and the “rapidly developing patchwork” of AI-specific regulations in the US and internationally.