Calfee Connections

During a CLE seminar, Calfee Intellectual Property Partner Bradley S. Pulfer discussed with in-house legal counsel how corporate legal departments are balancing customer demand and risk considerations related to AI-enhanced technologies.

Watch the full video.

Recording from Calfee’s November 2024 CLE seminar, "Securing the Future: AI, Data Privacy, and Cybersecurity for Businesses," hosted by the Intellectual Property Practice Group, Columbus, Ohio.

Video Transcript

Question on screen: How are corporate legal departments balancing customer demand and risk considerations related to AI-enhanced technologies?

Bonnie Smith:

We are focused on our customers, we're focused on our customer data, what rights we have in that data. And I'll tell you right now, our standard contracts and templates, we don't have the rights in their data. I mean, we have access to a lot of data, but we can't be using their data to go train an AI model. I would say it's customer-driven for us, to answer your question.

Georgia Yanchar:

For us, I think the customers really do have a need for this. I mean, I feel like as the data grows, the need for generative, or for AI, I should say, grows. It's like trying to find your favorite socks in an increasingly large pile of laundry. You've got to be able to find what you want as you get more and more data. And so our customers want these tools to get insights into their data.

And for us, we still have some on-prem clients, right? So we just had like our big users conference a few weeks ago, our customers come from all over, and we spent a lot of time on the main stage showing off a lot of our new awesome AI tools because we want them to migrate to the cloud, and they want to have all these shiny new cool features that they can use, but they can't do it if they don't do this migration, right, so it's a little bit of a carrot and a stick.

But once you get to the most recent version of our property management systems and things, the possibilities are endless. And that's really where the future is and the connectivity between all the different products and integrations. They're really excited about that. It makes their job faster. I mean, there's a lot of pressures in the real estate industry right now, so for them to be competitive, they really want these things. And we're trying to really meet their demand.

I think for us, we were a little bit ahead of it. We made a decision before everybody was talking about AI to be the world's first AI-first prop-tech company. And so we kind of had that vision before. But now I think there's increasingly a lot of client demand for it. But at the same time, there's, like Bonnie alluded to, there’s a lot of wariness. When you're negotiating these customer agreements, trying to get all the rights you need to build these things for them is something that you have to be able to explain why we need these certain use rights and things.

And depending upon our customer segment, some of them are more willing than others, right? And so it can always be a discussion.

Bonnie Smith:

Yeah, I think it's inherent too in just the limitation of the technology itself, right? Our customers are concerned, they don't want a solution that we make for them to be output to their competitor, because we work with all competitors of each other. I think that's where the wariness for our customers comes from, and rightfully so. We are also wary of what in vendors and people who we work with for our data too, we really try to work with vendors that are going to give us our own Rockwell tenant. We're making sure we don't want to contribute any data to a larger model at all. We just at this point, we don't really want anything to do with that.

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Series:

1. AI Considerations for Corporate Legal Departments Video Series (Part One): How Are Companies Interacting With Emerging Technologies Like AI?
2. AI Considerations for Corporate Legal Departments Video Series (Part Two): What Are the In-House Legal Department Considerations in Branding Their Company's AI?
3. AI Considerations for Corporate Legal Departments (Part Three): What Are the Corporate Legal Department Considerations for Policies Related to Implementing Generative AI?
4. AI Considerations for Corporate Legal Departments Video Series (Part Four): How Are Corporate Legal Departments Balancing Customer Demand and Risk Considerations Related to AI-Enhanced Technologies?
5. AI Considerations for Corporate Legal Departments Video Series (Part Five): How Can In-House Legal Counsel Partner With Their Business Units to Support Innovation While Still Addressing Compliance, Ethics and Other Concerns?
6. AI Considerations for Corporate Legal Departments Video Series (Part Six): What Are Companies Doing to Adjust for the Regulatory Landscape in the AI Space?
7. AI Considerations for Corporate Legal Departments Video Series (Part Seven): How Can Companies Leverage These Emerging Technologies to Improve Legal Operations?

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