5 Reasons Why AI Legal Assistance is Dangerous for Record Labels…

1. AI Sounds Confident Even When It’s Wrong

One of the most dangerous things about AI-generated contracts is that they often sound legitimate.

Clean formatting.
Formal legal language.
Confident tone.

But AI systems are known to:

• Invent legal concepts

• Reference laws or cases that don’t exist

• Omit critical clauses without warning

These are often called hallucinations—and unless you already know what should be there, you won’t know what’s missing.

If a contract is missing something important, you don’t get an alert saying “Hey, this clause should exist.”
You just don’t find out until there’s a dispute.

At that point, it’s too late.

2. Missing Clauses = Real-World Consequences

Cassandra sees AI-generated contracts come across her desk regularly. The patterns are consistent:

• Jurisdiction clauses missing

• Term lengths unclear

• Rights not clearly defined

• Loopholes everywhere

Jurisdiction alone is a massive issue.

If you don’t specify where disputes are handled, you could find yourself:

• Forced into court in another country

• Subject to unfamiliar laws

• Paying far more in legal fees than you ever saved

AI doesn’t understand the realities of international music relationships—and modern labels are constantly working cross-border.

3. There Is No Accountability With AI

This is the part that really stuck with me.

If an attorney drafts something incorrectly, they are accountable.
There are professional obligations.
There is liability.

If AI drafts something incorrectly?

There is no recourse.

You can’t:

• Ask for clarification

• Demand corrections

• Hold anyone responsible

And once you sign a contract, it doesn’t matter who drafted it.

If you’re an adult and you sign it, you’re bound by it.

“I didn’t understand it” is not a defence.

4. No Attorney-Client Privilege

Anything you type into AI tools is not protected.

That means:

• Your prompts

• Your explanations

• Your strategy notes

…could potentially be subpoenaed in a future dispute.

When you speak to an attorney, those conversations are protected.

When you speak to AI, they are not.

Most people don’t even realize this risk exists.

5. What This Says to Artists You’re Trying to Sign

There’s another angle here that indie labels don’t always think about.

Artists don’t need labels anymore.

So when they do consider one, they’re asking:

• Do these people know what they’re doing?

• Can I trust them with my catalog?

• Are they professional?

Sending an artist a contract that is clearly AI-generated doesn’t inspire confidence.

“If a label can’t even invest in a proper contract, what does that say about how they’ll handle promotion, royalties, or long-term care for the artist?”

That perception matters more than ever.

So… Is AI Ever Okay to Use?

Yes. Absolutely.
Just not as the final authority.

Here are smart ways labels and artists can use AI responsibly:

✔️ Good Uses

• Learning about different deal structures

• Generating questions for your attorney

• Summarizing a contract before sending it to a lawyer

• Organizing your thoughts before writing an email

• Spotting possible red flags (not final answers)

❌ Risky Uses

• Drafting contracts from scratch

• Replacing legal review

• Trusting AI to know what’s “standard”

• Feeding confidential details into prompts