The New Jersey State Bar Association released its Advisory Committee on AI Report in April 2024, providing structured guidance on how attorneys should approach AI tools in practice. New Jersey joins a growing group of states that have moved beyond silence to give lawyers actionable direction.
The report addresses the core questions firms are asking: billing transparency, client data protection, and disclosure obligations. While it is an advisory report rather than a binding ethics opinion, it carries significant weight in New Jersey's legal community and signals the direction of future formal regulation.
What the Bar Says
The Advisory Committee on AI Report (April 2024) takes a comprehensive approach to AI ethics. It interprets New Jersey's Rules of Professional Conduct in the AI context and provides specific recommendations across competence, billing, confidentiality, and disclosure.
Key positions: attorneys must develop AI competence before using these tools in practice (Rule 1.1), must evaluate AI vendors for data protection compliance (Rule 1.6), must adjust billing to reflect AI efficiency (Rule 1.5), and should disclose AI use to clients. The report also supports court-mandated disclosure requirements, aligning with the growing judicial trend in New Jersey federal courts.
Billing Implications
New Jersey's report states that attorneys must adjust billing to reflect AI efficiency and maintain transparency with clients about AI's role in their work. This is a clear prohibition on billing AI processing time at attorney hourly rates.
The practical implications: if AI drafts a brief in 5 minutes that would have taken an associate 6 hours, the client should not be billed for 6 hours. Attorneys can bill for the time spent directing, reviewing, editing, and validating AI output. AI tool subscription costs may be passed through to clients, but this must be disclosed and agreed upon. Value-based and flat-fee billing models avoid these complexities entirely.
Confidentiality Rules
The report includes strong guidance on protecting client data when using AI tools. Attorneys must conduct AI vendor evaluations before use, assessing data retention policies, training data practices, and security measures. This is not optional -- it is framed as a core component of the Rule 1.6 duty.
Specific requirements: understand how each AI tool processes and stores data, ensure vendor terms of service do not allow client data to be used for model training, obtain appropriate data protection agreements, and maintain records of vendor evaluations. Consumer-grade AI tools that lack these protections should not be used for client-related work.
What's Still Unclear
The report supports court-mandated AI disclosure and recommends client transparency, but does not define a specific disclosure threshold. How much AI involvement triggers the disclosure obligation? The report does not specify.
The New Jersey Supreme Court has not adopted the report as binding guidance, leaving it as persuasive but not mandatory. New Jersey federal courts (District of New Jersey) have been among the more active courts nationally on AI disclosure, but state court rules have not caught up. The gap between advisory guidance and enforceable rules creates uncertainty for firms trying to establish firm-wide policies.
The Bottom Line: New Jersey's April 2024 AI advisory report requires billing transparency and vendor vetting -- strong guidance that signals where binding rules are headed.
AI-Assisted Research. This piece was researched and written with AI assistance, reviewed and edited by Manu Ayala. For deeper takes and the perspective behind the research, follow me on LinkedIn or email me directly.