KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Protecting company assets from AI  
December 7, 2024
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Protecting company assets from AI
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Ken,
          With the rapid adoption of AI tools, employees are increasingly using these technologies in both their personal and professional lives. How can we effectively protect the company’s assets while employees engage with AI?  I appreciate your insights and look forward to your guidance on this matter.
I think of Google as a search engine that now has AI features and ChatGPT or similar apps as AI.  What should companies be thinking about when it comes to how we should instruct employees on how to use AI?  Any limitations? 
  Kind regards,
Christine
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Response
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          I don’t think I have any particular expertise when it comes to AI or technology in general.  I played around with AI, even had it draft an article for this forum – that was at least 2 years ago.  I don’t think I was able to use much of the AI drafted article.  I am told that if I fed AI all the thousands of articles I’ve authored AI would draft responses and articles very much as I would.  I’m skeptical.
          Your question poses the AI question in terms of protecting company assets.  Alarm companies are particularly vulnerable to liability for reasons well beyond their control, the familiar prevention v protection issue and other issues pertaining to effectiveness of the security or fire alarm system.  As usual keep in mind I lump all the security devices, cameras, access control. Etc., when I refer to alarm systems; they all present their unique from of exposure, but potential liability nevertheless.
          AI is not a substitute for human intelligence, which of course varies among people, at least not yet as far as I know.  Therefore, your sales people can’t have AI prepare a proposal that presents all the puffery some proposals contain in addition to the list of equipment, services and cost.  AI might provide a good first draft but your sales people will need to be smart enough to know that human edit is necessary. 
          I engaged AI to draft an alarm contract; it failed miserably.  I suppose it might not be too long until AI finds a K&K agreement and adopts it, but even then it won’t be updated, unless AI has hacked into my office computers. 
          With changing times and technology all this old country lawyer can suggest is, go with the flow and be careful.  One other thing, rely on your professionals, especially your lawyer [and ok the other professionals too] because an internet search is no substitute for 50 years of legal experience, at least until my hard drive loses its connection.
          I was about to post the above for circulation and decided to ask AI the same question.  Here is AI’s answer to your question, which I must say, is impressive.
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You said:
With the rapid adoption of AI tools, employees are increasingly using these technologies in both their personal and professional lives. How can we effectively protect the company’s assets while employees engage with AI? I appreciate your insights and look forward to your guidance on this matter. I think of Google as a search engine that now has AI features and ChatGPT or similar apps as AI. What should companies be thinking about when it comes to how we should instruct employees on how to use AI? Any limitations?
ChatGPT said:
ChatGPT
The rapid adoption of AI tools presents both opportunities and risks for organizations. Protecting a company’s assets while employees engage with AI involves addressing potential threats, ensuring responsible use, and educating employees on best practices. Here’s a breakdown of key considerations and recommendations:

Key Considerations:
  1. Data Security and Privacy Risks:
    • AI tools, including ChatGPT, can process sensitive or proprietary information, which may be stored or shared inadvertently.
    • Open-ended AI systems may not guarantee data confidentiality.
  2. Intellectual Property (IP):
    • Employees could unintentionally expose proprietary IP or trade secrets.
    • AI tools might generate content that could inadvertently infringe on third-party IP.
  3. Regulatory Compliance:
    • AI interactions may inadvertently breach data protection laws (e.g., GDPR, HIPAA).
  4. Bias and Ethical Concerns:
    • Generative AI tools might produce biased, inappropriate, or factually incorrect outputs, which could harm the company’s reputation.
  5. Employee Productivity:
    • Misuse or over-reliance on AI tools can reduce critical thinking or lead to errors.
  6. Licensing and Usage Restrictions:
    • Some AI tools have licensing terms that restrict certain business applications or dictate how generated content can be used.
Guidance for Companies:
1. Develop Clear Policies for AI Use:
  • Approved Tools: Specify which AI tools are approved for professional use.
  • Permitted Use Cases: Define acceptable tasks for AI (e.g., brainstorming, coding assistance) and prohibited ones (e.g., processing confidential data, making final decisions).
  • Data Restrictions: Explicitly prohibit the input of sensitive, proprietary, or regulated data into AI tools.
2. Train Employees:
  • Risks Awareness: Educate employees on the potential risks of using AI tools, especially regarding data privacy and security.
  • Best Practices: Provide examples of responsible AI use, such as anonymizing data and validating AI-generated outputs.
  • Ethics and Bias: Train employees to recognize bias and fact-check outputs before use.
3. Technical Safeguards:
  • Restrict Access: Use firewalls or application controls to block unapproved AI tools from corporate networks.
  • Monitor Usage: Implement monitoring systems to track AI tool interactions for potential misuse.
  • Data Anonymization Tools: Provide tools that strip sensitive information before employees interact with AI systems.
4. Legal and Compliance Safeguards:
  • Licensing Review: Ensure that the organization’s use of AI tools complies with licensing terms.
  • Legal Consultation: Work with legal teams to assess risks, especially in regulated industries.
  • Audit Trails: Maintain logs of AI interactions to support compliance and investigate any issues.
5. Encourage Responsible Innovation:
  • Encourage employees to propose innovative ways to use AI responsibly while maintaining security and compliance.
Limitations to Enforce:
  1. No Sensitive Data: Employees should not input passwords, financial data, customer information, or proprietary company information into AI tools.
  2. Review Before Use: All AI-generated outputs should be reviewed by a human for accuracy and relevance.
  3. Avoid Autonomous Decisions: AI tools should assist, not replace, critical decision-making processes.
  4. No Public Disclosure: Employees should avoid generating content through AI tools for external communications without approval.

Conclusion:
Organizations must balance enabling innovation with safeguarding assets and compliance. Developing a robust AI usage policy, educating employees, and leveraging technical safeguards will ensure the responsible use of AI tools without compromising the company’s interests.
Would you like help drafting a detailed AI policy or a training framework for your organization?
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K&K Holiday Party 2024 – Napco will be providing grab bag gifts to dealers attending
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          The K&K Holiday Party will be on December 12, 2024 in Old Westbury, NY from 6:30 to 9:30 PM.  If you are coming you should have RSVP'ed to Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com or Amy Laveglia at 516 747 6700 x 313 or ALaveglia@Kirschenbaumesq.com or on the sperate invite.
          Special thanks to Napco who is promising to have give away grab bag gifts.  It's a surprise and you won't want to miss out.  Thanks to Dick and Donna Soloway and the Napco crew for their support and generosity.  
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com