Do I really need a lawyer when there's ChatGPT?

Small business owners often feel caught between the high cost of legal services and the necessity of proper legal support. With rising legal fees in the UK, it’s tempting to turn to AI solutions like ChatGPT, which promise fast, affordable answers to legal questions. But while ChatGPT can handle simple queries, it falls short when it comes to the depth and specificity required for business-critical legal decisions.

Here’s why AI alone might not be the right fit for managing your business’s legal needs—and how partnering with a dedicated legal expert can save you time, money, and stress in the long run.

1. AI lacks the depth to deal with real-world business law

Imagine you’re drafting a contract with a new supplier and want to ensure your business is covered in case they don’t meet deadlines or the product quality isn’t as promised. So, you turn to ChatGPT, which might generate a contract with some basic terms. It’s quick, but it won’t think about the real-life scenarios that can arise later—like what happens if you need to terminate the contract, or if the supplier suddenly raises prices or goes out of business. Without these critical protections, your business could be exposed to unexpected risks.

With ChatGPT, you’re missing out on a lawyer’s depth of experience and insight. A lawyer would walk you through these “what ifs,” suggesting provisions that protect you if the supplier shuts down, changes pricing, or fails to meet quality standards. They’d know to include clauses for refunding deposits if a supplier goes bankrupt, penalties if delivery deadlines aren’t met, and restrictions on sudden price hikes. AI might give you a contract template, but it can’t offer the strategic foresight or explain why these details matter for your business specifically.

2. When accuracy counts, ChatGPT could miss the mark

For any small business, accuracy is everything. Legal documents need to be correct and comprehensive because mistakes can cost you, sometimes dearly. While ChatGPT can certainly pull up information, it’s not trained in the latest UK laws, nor can it distinguish between laws that apply generally versus those specifically relevant to your industry. Let’s say you’re setting up employment contracts; ChatGPT might give you general clauses but could miss important legal requirements specific to the UK—such as employee rights on sick leave or overtime. This oversight could mean non-compliance, putting your business at risk of penalties.

The stakes are even higher in industries with strict regulations, such as food, retail, or construction. You need a partner who’s up to date on these standards, someone who knows the regulations that matter for your industry. While AI is trained on large datasets, it won’t guarantee that the advice it gives applies to the latest laws or your specific business model. Lawyers can, however, tailor advice based on the latest legislation, making sure your documents are watertight and relevant. A Thomson Reuters study shows similar industry concerns about ChatGPT’s accuracy.

3. Legal issues demand accountability—AI doesn’t take responsibility

Small businesses live and breathe on trust and accountability. When things go wrong, having someone who stands behind their work matters. If you rely on ChatGPT and receive faulty advice, there’s no accountability if that advice leads to losses. Let’s say you’ve used ChatGPT’s guidance for a business lease, and later you find out that critical terms are missing, leading to unexpected costs or disputes. AI won’t help fix it, nor can it offer the guidance needed to prevent issues in the first place.

A real lawyer takes responsibility for the advice they provide. Not only are they accountable for getting things right, but they also act as a sounding board when you’re unsure about your options. You know there’s a human you can go to with questions or follow-ups—something AI can’t offer.

4. Confidentiality can’t be guaranteed with AI

In a small business, your legal matters are often deeply intertwined with sensitive details about clients, finances, and future plans. When you speak with a lawyer, confidentiality is paramount; they’re legally bound to keep your discussions private. Using AI tools can place your privacy at risk. They tends to retain data for model training, and this data could include details you’d rather not have circulating.

If you’re working with customer data, talking about contract terms, or planning a strategy against competitors, you don’t want those conversations stored by a third-party AI platform. The risks of accidental data leaks are real, and for business owners, reputation is everything. A lawyer gives you that added layer of protection, ensuring your discussions remain secure and confidential.

5. AI can’t create a legal strategy tailored to your growth

When you work with a lawyer, they don’t just solve immediate issues—they help you plan for the future. Whether it’s expanding your services, hiring new staff, or taking on investment, each of these moves has legal implications that a lawyer can help you anticipate and navigate. ChatGPT can answer questions, but it can’t create a strategy to help you grow while staying legally compliant.

For instance, say you’re planning to open a second location. A lawyer can advise on lease agreements, employee onboarding, and local regulations, all of which can vary widely. AI, on the other hand, would give general answers without that proactive perspective. For small businesses aiming to expand, having a legal partner means you’re proactively covering risks, not just reacting when problems arise.

6. AI might leave you exposed when dealing with disputes

When disputes come up—whether with customers, suppliers, or employees—you want someone in your corner who understands the intricacies of negotiation and dispute resolution. AI might provide you with a few generic suggestions, but it can’t represent you or stand by you if the issue escalates. A lawyer’s expertise is vital here; they’ll know how to handle disputes to avoid escalating conflict, saving you time, stress, and potentially costly settlements.

Consider a dispute over a delayed payment. ChatGPT might suggest generic follow-up language, but a lawyer would advise on how to phrase the follow-up, how much pressure to apply, and, if needed, which steps to take if the client fails to respond. AI cannot replace this nuanced approach.

The smart move for business owners

While AI tools like ChatGPT can be useful for basic information, they fall short when it comes to managing the legal intricacies that protect your business. From tailoring contracts to handling sensitive disputes, legal matters often require a depth of insight and accountability that only a human lawyer can provide. By partnering with a dedicated legal professional, you’re not only safeguarding your business but also investing in peace of mind and strategic support for the future.