California has officially entered a new era of artificial intelligence regulation. Governor Newsom has signed Senate Bill 574 (SB 574) into law—a “first-in-the-nation” measure establishing clear statutory boundaries for how attorneys and arbitrators operating in California use generative AI tools in their professional practice.
As a practical matter, effective as of January 1, 2027, SB 574 creates several core obligations for attorneys. Among them: (1) a duty not to enter confidential, personal identifying, or other nonpublic information into a generative AI system unless access to that system is restricted to the attorney and authorized persons bound to protect its confidentiality; (2) a duty to take reasonable steps to verify the accuracy of AI-generated output, including all case and statutory citations, and to correct any “hallucinated” results; and (3) a duty to disclose the use of generative AI to the court for documents submitted.
Link to 1. Prohibition on Delegating the Practice of Law 1. Prohibition on Delegating the Practice of Law
The legislation draws a hard line: under new Business and Professions Code § 6068.1(a)(2), an attorney “shall not delegate the practice of law to generative artificial intelligence.” While generative AI can assist with research, drafting, and routine administrative tasks, the ultimate professional judgment and legal analysis must remain the responsibility of the human attorney.
Link to 2. Mandatory Verification and Accuracy 2. Mandatory Verification and Accuracy
SB 574 makes citation verification a statutory duty. New Business and Professions Code § 6068.1(a)(3)(B) requires attorneys to take reasonable steps to verify the accuracy of AI output—including case and statutory citations—and to correct hallucinated results.
Significantly, an amendment to Code of Civil Procedure § 128.7 reaches even further. It provides that any brief, pleading, motion, or other paper filed in court may not contain a citation the responsible attorney has not personally verified—including, but not limited to, citations generated by AI.
Link to 3. Statewide AI Disclosure 3. Statewide AI Disclosure
SB 574 creates a statewide obligation to disclose the use of generative AI to the court for documents submitted. The law also adds a softer duty for attorneys to “consider whether to disclose” the use of generative AI when it is used to create content provided to the public, including blog posts such as this.
Link to 4. Standards for Arbitrators 4. Standards for Arbitrators
The law extends beyond traditional courtroom practice to arbitrators. Under new Code of Civil Procedure § 1282.1, an arbitrator “shall not delegate any part of their decision-making process to any generative artificial intelligence tool.” Arbitrators are also barred from relying on AI-generated information outside the record without advance disclosure to the parties and, where practical, an opportunity for the parties to comment.
Link to 5. Enforcement and Sanctions 5. Enforcement and Sanctions
The statute gives courts a clear framework to impose sanctions for violations, and conduct may also be subject to State Bar discipline. This aligns with a growing national trend of courts penalizing counsel for submitting filings that contain AI-generated inaccuracies.
Link to The Bottom Line The Bottom Line
SB 574 formalizes what many state bars have emphasized in recent ethics opinions: AI is a tool, not a replacement for legal expertise. The law reinforces attorneys’ existing duties of competence and diligence in the age of generative AI—indeed, it expressly provides that nothing in it abrogates those duties. As regulatory scrutiny increases, firms should prioritize internal policies that mandate human-in-the-loop verification for any AI-assisted work product and ensure attorneys use only firm-approved, secured AI tools when handling nonpublic information.