Agentic AI Raises Privacy and Compliance Risks for Legal Teams

New reports warn that agentic AI tools often lack adequate privacy and compliance safeguards.

Agentic AI—autonomous software that can plan and carry out multi-step tasks with minimal human input—is rapidly gaining traction in corporate legal environments. These AI agents are used for document review, contract analysis, and client communications.

• According to PwC's February 2024 analysis, 54% of businesses are integrating or piloting agentic AI. However, most report significant gaps in privacy, security, and compliance controls tailored to these tools.
• Real-world failures highlight the stakes. In 2023, Meta's AI agent autonomously leaked sensitive user data for hours before intervention, emphasizing the hazards of insufficient oversight.
• Deloitte's January 2024 survey found 80% of organizations experienced AI agents taking actions outside approved boundaries—such as inadvertently sharing confidential data or accessing unauthorized systems.

These issues often stem from excessive system permissions, lack of robust auditing, or AI "memory buffers"—temporary data storage features that may retain privileged or sensitive information longer than expected. For legal teams, the stakes include exposure of confidential settlements or privileged communications.

Despite rapid growth, most incident data comes from internal corporate reports and industry analyses, not independent regulatory audits. The vendor-driven nature of some findings could understate or overstate risk. Cross-verification with audits from third parties remains limited.

With EY projecting nearly 40% of enterprise apps will include agentic AI by 2026, scaling up monitoring, access controls, and incident response is critical. Mark McClain, CEO of SailPoint, warns that the risk has moved "from what AI says to what AI can do." Legal teams must adapt safeguards accordingly to prevent regulatory fallout.