California SB 574: Will AI’s Home State Kill Off AI for Law?

By Erin Fraser.

The California legislature will wrap its 2025-2026 legislative session on August 31, but there is a bill still alive in the legislature that is of interest to Artificial Lawyer readers: SB 574. If passed, that bill would amend the California Business and Professions Code to add some guardrails for attorneys and arbitrators using “generative artificial intelligence” (defined as “an artificial intelligence system that can generate derived synthetic content, including text. . .”). 

The bill responds to hallucinated citations in court briefings.  Much of the bill makes sense; lawyers should verify accuracy, correct mistakes, and avoid putting sensitive data in consumer-grade tools (proposed Business and Professions Code §§ 6068.1(a)(3)(B)(i), (ii), and (a)(3)(A), respectively). Yet the bill also has a more sweeping rule that raises significant questions about the bounds of AI tool use in a profession already being transformed: “An attorney shall not delegate the practice of law to generative artificial intelligence” (proposed Business and Professions Code § 6068.1(a)(2)).  What does “delegate” mean?  How about “the practice of law”?

This provision operates differently than the rest of the law—rather than allowing for supervision, it does not allow delegation of the practice of law at all. To see why this matters, start with what “the practice of law” means.  California courts have wrestled with that concept for at least 100 years.

People v. Merchants Protective Corp. (from 1922) involved a corporation accused of practicing law in California.  The court in Merchants Protective Corp. quoted with approval an 1893 case which defined the practice of law as follows:“

[I]n a larger sense it includes legal advice and counsel and the preparation of legal instruments and contracts by which legal rights are secured although such matter may or may not be depending in a court.

The law has continued to evolve, and courts have repeatedly noted the lack of a clear definition of “practice of law”, and the reasons are easily illustrated with a hypothetical.  Consider a transactional attorney with a solo practice supported by non-lawyer staff; considering which tasks constitute the practice of law is challenging.

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• Surely conversation with the client is the practice of law, but what if our solo attorney uses intake software to avoid the initial call with clients?  Or if the attorney has her legal assistant do client intake?  That seems ok; so perhaps not all client communication is the practice of law.
• Well, drafting then; drafting is the legal practice part.  Paralegals routinely compose first drafts of documents for attorney review, not to mention the plethora of legal software that drafts based on templates.  Well, those must be ok; maybe not all drafting constitutes the practice of law.
• Attorneys advise their clients, that’s what lawyers do, give advice.  That works well enough until you consider what form that advice takes.  Must it be oral to be the practice of law? What if it is written?  If it is written, does the attorney need to draft it?  Now we’re back to drafting.
• Meanwhile, California courts have held that clerical preparation services do not constitute the practice of law, and that impersonal instruction on form completion may also be permissible.  And yet, case law from over 15 years ago established that software which allowed automated, customized suggestions about how to complete certain court filings was sufficiently non-clerical as to constitute the practice of law in California.

It becomes clear how challenging a precise definition would be.  Nevertheless, for fun let’s now apply the transitive property of equality (from geometry class) to the proposed legislation.  In other words, swap out “the practice of law” and apply some hypotheticals in its place:

• 6068.1(a)(2). An attorney shall not delegate [client communication] to generative artificial intelligence.
• 6068.1(a)(2). An attorney shall not delegate [drafting advice] to generative artificial intelligence.
• 6068.1(a)(2). An attorney shall not delegate [researching which form to file] to generative artificial intelligence.

Recall that this is a hard prohibition; it is not a requirement to supervise under these circumstances.  If the language in the bill becomes law, what uses of generative AI are left for lawyers?  Clerical tasks, but as the case law reveals, what constitutes clerical can be quite narrow (narrower than what many attorneys use staff for in modern practice).  Research regarding the appropriate form is out; what about research regarding the law?  What about tabular review for diligence?  What about drafting some or all of a client communication?

It is worth pausing to consider that, in the United States, lawyers are admitted to practice before courts (duh) and thus it is the courts that admit and regulate lawyers.  The bar exam is a creature of the judiciary.  The California Rules of Professional Conduct (which govern the ethical duties of lawyers) are issued by the Supreme Court of California, not the California legislature.  Yet it is unclear whether hallucinated citations fall within the attorney regulation sphere (reserved to the courts) or the consumer protection sphere (where the legislature may act).  In other words, does it present a constitutional conundrum if the legislative branch is messing about with attorney AI use in the first place?

One great promise of AI-native law firms is the idea that the AI can prepare research or documents for attorney review—that is significantly across the Rubicon of form selection. Thus SB 574 could, if the statutory language remains the same, be an existential threat to sales and use of these tools within the most populous U.S. state. 

While we weigh that heavy question, it is worth noting that the judicial branch has not been sitting idly by. The State Bar issued initial guidance in November 2023 and updated that guidance earlier this summer. The updated practical guidance includes a rule-by-rule explanation that explores the nuance of using public and private AI systems, charging for work where AI use was involved, and supervising agentic systems. All of which is to say, the State Bar is doing its job of regulating lawyers and giving California practitioners guidance. 

This bill will be one to watch.

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About the author: Erin Fraser is a private client attorney at a large international law law firm where he focuses his practice on tax, trusts and estates. He is also a member of Legal Quants, a global community of ai-forward attorneys; and an adjunct professor of law. The opinions expressed are his own.

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[ This is a pro bono educational think piece for Artificial Lawyer. ]

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(RT Pic of Golden Gate Bridge, San Francisco, June 2026.)