According to the bill summary, attorneys cannot delegate the practice of law to generative AI, must verify AI-generated outputs, and must not enter confidential or nonpublic information into generative AI systems without appropriate safeguards. For many law firms, SB 574 is less about restricting AI and more about establishing clear expectations for its responsible use.

What SB 574 Requires

The legislation establishes several important requirements for attorneys using generative AI:

Attorneys Must Remain in Control AI can assist attorneys, but it cannot replace attorney judgment. Legal strategy, analysis, and decision-making remain the responsibility of the licensed professional. This means AI should be viewed as a research assistant, not a substitute for an attorney's expertise.

AI-Generated Citations Must Be Verified One of the most significant provisions of SB 574 requires attorneys to personally verify citations before filing documents with the court. The bill specifically prohibits attorneys from relying on citations generated by AI that they have not independently verified. This addresses a growing concern throughout the legal industry: AI-generated hallucinations, including nonexistent cases, inaccurate quotations, and incorrect legal references.

Attorneys Must Verify Accuracy The law also requires attorneys to take reasonable steps to verify the accuracy of AI-generated content and to correct any erroneous or hallucinated output used in their work. In practice, this means AI-generated research, summaries, drafts, and analyses must be reviewed and validated before being relied upon.

Protection of Confidential Information SB 574 further requires attorneys to avoid entering confidential, personally identifying, or other nonpublic information into generative AI systems as specified by the law. For law firms, the security and privacy protections of an AI platform are now more important than ever.

What This Means for Law Firms

Many firms have already begun experimenting with tools such as Microsoft 365 Copilot, NetDocuments ndMax, CoCounsel, and AI-enhanced legal research platforms. Under SB 574, the question is no longer whether firms can use AI. The question is whether they are using AI responsibly.

Law firms should evaluate:

• Which AI tools are approved for use
• Whether those tools provide enterprise-grade security protections
• How client information is protected
• Whether attorneys understand their review obligations
• How AI-generated research and citations are validated
• Whether firm policies reflect current ethical and regulatory expectations
• Firms that fail to establish governance around AI may expose themselves to compliance, ethical, malpractice, and reputational risks.

How Terrapin Can Help

At Terrapin Technology Group, we've been helping law firms navigate technology, security, compliance, and document management challenges for decades. As AI adoption accelerates, we are helping firms develop practical approaches that balance innovation with risk management.

AI Strategy and Governance We work with firms to develop AI governance frameworks tailored to their practice areas, risk tolerance, and existing technology investments.

This includes:

• AI acceptable-use policies
• Client confidentiality guidelines
• Security and compliance reviews
• AI technology evaluations
• Vendor risk assessments

Microsoft 365 Copilot Readiness Many firms are interested in Microsoft 365 Copilot because of its enterprise security model and integration with existing Microsoft investments.

Terrapin can help firms:

• Assess Copilot readiness
• Review data governance and permissions
• Implement Data Loss Prevention (DLP) controls
• Configure Microsoft Purview protections
• Develop secure AI workflows

NetDocuments AI and Knowledge Management For firms leveraging NetDocuments and emerging AI capabilities such as ndMax, we help ensure document management practices, ethical walls, workspace security, and information governance are aligned with AI-powered workflows.

Security and Compliance Reviews AI introduces a new layer of data-protection considerations. Our team can evaluate:

• Information governance policies
• Data classification standards
• Risk exposure from unmanaged AI usage
• Shadow AI concerns
• Client confidentiality protections

Training for Attorneys and Staff Technology policies alone are not enough. We provide practical training focused on:

• Understanding AI limitations
• Recognizing hallucinations
• Citation verification procedures
• Secure prompting techniques
• Ethical use of AI in legal practice
• Best practices for legal research and drafting

The Opportunity Ahead

SB 574 should not be viewed as a barrier to innovation. Instead, it reinforces what most legal professionals already understand: technology can improve efficiency, but responsibility cannot be outsourced.

Law firms that establish clear policies, implement secure technology platforms, and train their attorneys to use AI responsibly will be well-positioned to benefit from the productivity gains AI offers while meeting their ethical obligations. The firms that succeed will not be the ones that avoid AI. They will be the ones that govern it effectively.

About Terrapin Technology Group Terrapin Technology Group helps law firms and professional services organizations leverage technology securely and effectively. From Microsoft 365, Copilot, NetDocuments, cybersecurity, information governance, and legal technology consulting, our team helps clients modernize operations while protecting client data and reducing risk.

Looking for guidance on AI governance, Microsoft Copilot, NetDocuments AI, or secure AI adoption? Contact Terrapin Technology Group to learn how we can help your firm prepare for the next phase of AI in legal practice.