Shadow IT and AI in Law Firms: Risks and Prevention Guide

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Printed Feb 2, 2026

What’s shadow IT?

Shadow IT is software program that’s used with none information, approval, or oversight from a regulation agency’s IT consultants. Broadly talking, shadow IT contains software program that’s downloaded and put in on native {hardware}, in addition to cloud-based instruments that may be accessed by logging into an internet browser. 

For instance, people might set up or arrange entry to their private file-sharing apps (like Dropbox or their OneDrive accounts), communications instruments (together with social media messaging apps), or different productiveness options. 

At present, AI options equivalent to ChatGPT, Gemini, and Claude are among the most dangerous types of shadow IT for regulation corporations. Whereas these instruments make employees far more productive, in addition they carry inherent dangers, particularly on the subject of the delicate data managed inside a regulation agency. 

It’s troublesome to know the way widespread shadow IT is (therefore the title), which is why regulation corporations must know the dangers, the place they stem from, and find out how to be proactive in stopping them. 

Shadow IT within the age of AI (aka “shadow AI”)

Legal professionals and their employees have been particularly fast to undertake AI. In accordance with the  2025 Authorized Traits Report, 79% of authorized professionals say they use AI of their work. General, it is a good factor, because it’s unlocked a protracted checklist of research-backed advantages for attorneys. 

However with so many utilizing the know-how for authorized work, “shadow AI” (i.e., private AI options utilized by agency employees) poses its personal issues, particularly since public fashions sometimes don’t carry any privateness ensures for data that’s shared with them. 

In truth, California’s Senate just lately handed a invoice that may prohibit using generative AI, and particularly general-purpose AI options, in regulated professions equivalent to regulation. Central to the invoice is the stipulation that attorneys not enter any confidential, private figuring out, or different nonpublic data right into a public generative AI system to forestall breaches of attorney-client privilege. 

In gentle of this, it’s extra necessary now than ever that attorneys and their corporations put in place pointers for the protected dealing with of agency data when utilizing AI. But regardless of the necessity, 44% of regulation corporations don’t have any coverage on how AI must be used (2025 Authorized Traits Report), and what dangers must be taken under consideration. 

Whereas most applied sciences (AI or not) aren’t essentially malicious of their strategy to knowledge safety (they aren’t taking consumer knowledge for the aim of committing a criminal offense), they will nonetheless introduce vulnerabilities that corporations ought to pay attention to. 

The dangers of shadow IT for regulation corporations

IT groups make investments important time, power, and assets to make sure safe knowledge operations for regulation corporations. This work includes completely vetting options, configuring knowledge protocols (inside particular person software program platforms in addition to between them), and creating insurance policies and procedures to make sure employees are skilled in find out how to keep the utmost knowledge safety and privateness for the agency. 

When employees circumvent these safeguards, they introduce dangers for the agency and the shoppers that its attorneys are sworn to guard. 

A few of the key dangers to shadow IT embody: 

Information administration: Any data saved in a employees member’s personal non-public software program gained’t be obtainable to the broader workplace, which may hinder accessibility and collaboration on necessary initiatives.
Safety protocols: When people outline their very own safety parameters, they could not comply with greatest practices for utilizing sturdy and distinctive passwords. They might additionally skip two-factor authentication, which is by far the strongest means to forestall unauthorized entry to consumer accounts. 
Threat of information loss: When a person takes a go away or transitions out of the agency, their work shall be misplaced if it isn’t captured inside the databases managed by the agency. 
Information lifecycle administration: Equally, if knowledge lives on platforms managed by particular person employees, the agency gained’t be capable of handle that knowledge in accordance with their retention schedules, nor will they be capable of securely get rid of it. 
Information breaches or publicity: With out correct vetting from skilled IT professionals, it’s troublesome to know the way a lot rigor an organization has put into their safety and privateness safeguards. Even when coping with a good software-provider, the safety and privateness ensures required by regulation corporations might come at a premium, included solely in higher-tier or enterprise plans. 

Dangers regulation corporations must learn about shadow AI

For attorneys, knowledge privateness is very problematic with shopper AI options equivalent to ChatGPT, Gemini, and Claude. Whereas these applied sciences are extremely highly effective and versatile, they usually don’t have privateness ensures, notably when utilizing free variations.

Which means that when agency employees use these merchandise, whether or not keying in queries or importing recordsdata, they must be particularly cautious to not share any delicate agency data (e.g., any personally identifiable data of shoppers). 

These dangers are much more critical for regulation corporations that take care of delicate data ruled by further rules; for instance, any agency coping with protected well being data may unknowingly run afoul of HIPAA’s strict knowledge dealing with necessities. 

That is the place the good thing about a authorized platform answer can provide a number of workflows and capabilities inside a safe atmosphere. Clio and Clio’s AI capabilities, for instance, guarantee non-public and safe knowledge protocols for all agency operations. When utilizing Clio’s AI, all knowledge is processed in actual time and isn’t saved or reused, and it by no means leaves Clio’s safe knowledge infrastructure. 

Why employees flip to shadow IT 

Whereas using shadow IT may be problematic for regulation corporations, the fact is that employees flip to their very own options to make life simpler for themselves. When employees aren’t proud of the methods supplied by their agency, they’re extra more likely to search their very own options. 

Typically, the issue is that corporations use software program that’s outdated, inefficient, and troublesome to make use of. In different conditions, the agency might not present any capabilities for sure duties or workflows. 

In both case, employees can undertake software program that they already use of their private lives, or they could even pay out of pocket for a enterprise answer that they see as important to their work. AI merchandise particularly are prime candidates for shadow IT as a result of they’re so versatile and can be utilized for therefore many various kinds of work. 

On the finish of the day, most employees wish to get their work finished quicker, extra effectively, and with a better diploma of high quality (and ideally with much less fuss). 

How one can forestall shadow IT and shadow AI at your regulation agency

The important thing to managing, or ideally stopping, using shadow IT and shadow AI is to be proactive. You’ll wish to make sure that you talk clear pointers for what varieties of options can and may’t be used on the agency, whereas additionally guaranteeing that employees have entry to the instruments and capabilities they want. 

1. Implement and assessment agency software program insurance policies

It’s necessary that your regulation agency have clear pointers on the software program that employees are permitted to make use of, and the way knowledge must be collected and managed inside them. These insurance policies must be reviewed recurrently, particularly in gentle of latest applied sciences like AI. In case your regulation agency hasn’t carried out particular steerage on AI but, make creating an AI coverage a precedence. 

2. Present the appropriate options 

Companies ought to present options with the capabilities and help that employees want for his or her work. If employees have what they want, they’ll don’t have any cause to look elsewhere for non-sanctioned instruments. 

In a regulation agency, employees sometimes search for options which might be designed particularly for authorized work, equivalent to instruments to do authorized analysis and draft authorized paperwork. These methods must be straightforward to make use of and never require a variety of repetitive motion to finish a job, which may be irritating for employees. The upside of legal-specific software program is that it sometimes comes with the information safety and privateness ensures that attorneys and their IT groups want. 

3. Educate and prepare your employees

It’s one factor to create guidelines on what options can be utilized; it’s one other to supply the coaching and help to make sure everybody is aware of how to make use of them. When employees assume they lack sure capabilities, they could simply want a greater understanding of their present methods and processes. 

Just a few ways in which corporations can help higher information and coaching: 

Create inner information hubs. These hubs can present pointers on find out how to use methods and processes and the way to make sure the protected dealing with of agency data. These assets may embody detailed how-tos or brief step-by-step directions and movies. 
Designate “software program champions” to troubleshoot points. These employees members ought to have probably the most information and understanding of the answer on the agency, together with particulars on implementations, processes, and the place to hunt further help if wanted. 
Set up coaching protocols. Coaching must be supplied to new employees as quickly as they’re employed, and present employees ought to obtain coaching for brand spanking new methods as they’re carried out. In lots of circumstances, particular person software program platforms provide their very own in depth coaching and help (and even in-depth certifications), which saves the agency having to set these up from scratch themselves. 

4. Pay attention, be supportive, and be open to wants

The know-how panorama is quick evolving, and that is very true for legaltech. As new options and capabilities grow to be obtainable, your employees will usually have a primary line on what’s most helpful and precious to their work, both from previous workplaces or from the suggestions of buddies and colleagues. 

Maintaining an eye fixed and ear out for brand spanking new know-how benefits will assist make sure that your agency is doing its greatest work for its shoppers, whereas additionally conserving employees completely happy. On the subject of software program, and avoiding shadow IT at your agency, this could be an important job of all. 

What to do should you uncover shadow IT at your regulation agency? 

If you happen to uncover employees utilizing a type of shadow IT at your regulation agency, it may be a possibility to determine potential gaps in your methods. 

The very first thing to do is to find out how the answer is getting used and the way your agency’s present methods aren’t ample. If you happen to discover that the software program is fixing an issue to your agency, you possibly can all the time assessment it additional to find out what knowledge is getting used, the way it integrates together with your methods, and if it meets your knowledge safety and privateness requirements. 

If the answer doesn’t meet the necessities of your agency’s software program insurance policies, or should you’ve decided that one other software program used on the agency already presents the identical functionalities, you’ll doubtless want to make sure that employees are conscious of your expectations and that your training and coaching is available. 

What are the prices of shadow IT? 

Shadow IT can incur unneeded prices for the agency. If employees use funds from the observe to buy their very own software program, your agency may find yourself paying for a number of options that every one do the identical factor. 

Extra critically, attorneys may be held responsible for knowledge exposures by their employees or third-party distributors in the event that they fail to keep up correct safety requirements. Penalties may embody regulatory sanctions, legal responsibility for monetary damages, and in excessive circumstances, even prison expenses. 

As if corporations aren’t busy sufficient, there’s additionally the time, effort, and assets wanted to take care of a knowledge breach if it happens. Past the stress of coping with all of this, there may be additionally the pressure of sustaining enterprise continuity and the potential impression to the agency’s repute to think about. 

Legaltech platforms provide extra capabilities, extra worth, and extra safety beneath one roof

Clio’s Clever Authorized Work Platform offers corporations the instruments and capabilities to handle each the enterprise of regulation and the observe of regulation inside one answer. 

When dealing with your casework in Clio, you get greater than only a system of report; you unlock a system of motion that takes on handbook work in your behalf, together with day-to-day scheduling, month-to-month billing, and routine consumer communications. 

For the observe of regulation, Clio can securely assessment particular person circumstances towards a authorized library that includes over one billion information to floor related precedents, assessment depositions and contracts, and even draft authorized paperwork, all with exact verification workflows. 

In case your employees is in search of what’s subsequent in authorized AI, make sure to e-book a demo with our staff as we speak.