By Harold Kerzner, Ph.D. and Elissa Farrow, Ph.D.
August 30, 2023
Background
For decades, companies have recognized the need for legal representation on projects. Legal representation appeared in procurement management and became one of the knowledge areas that is needed in most companies for successful project delivery. Both customers and contractors have traditionally identified on their project organizational charts the position of a project officer (PO) for legal and procurement matters. The position, which was most often staffed by a professional from the corporate legal group, was on a part-time basis. The use of the PO for legal and procurement was mainly during project initiation if there were contractual or legal concerns and part of the validation of project closure.
The responsibilities for the PO for legal and procurement generally included among other items the selection of the best contract type, compliance with contractual requirements for deliverables and regulatory setting, and participation in the approval of contractual changes that may be needed as the work progresses. But perhaps the most important responsibility was supporting the project team in risk mitigation efforts when necessary.
As project management matured, many of the activities performed previously by the PO for legal and procurement were being performed by the project managers (with specialist advice only as required). Today, with the growth in artificial intelligence (AI), the position of the PO for legal may return but may be called the PO for Ethical AI.
The Growth of AI
The rapid growth and interest in artificial intelligence by organizations worldwide has created legal headaches for companies on how AI should be used, especially in project management practices. The risks with using AI can be significant for both customers and contractors, and we can now expect more companies to staff their projects with team members who possess AI knowledge or AI credentials. The person assigned must be knowledgeable in the legal use of AI and techniques to mitigate each project’s exposure to AI risks and potential lawsuits. If a project team incorrectly uses AI and creates a product for a customer, then the customer could be exposed to lawsuits as well. For example, who is at fault when the AI denies a customer a service that leads to personal hardship and harm? This could be due to bias in the coding – who is at fault legally–is it the software owner, developer, purchaser, or project team for not doing appropriate assurances and testing?
Articles are being published that discuss many of the legal issues that can result from the use of AI. The two critical issues that will impact project management in the short term are (1) the security of priority information, and (2) infringement of copyrights. These two issues can create serious ethical problems on how and when project teams should use AI for making decisions for the creation of deliverables for customers.
As an example, let’s assume you are managing a project that requires your team to design a new product for a client. You decide to use AI for product design options and find a design you believe will satisfy your client’s needs. Some of the questions that need to be addressed include:
- Was the design you selected from AI copyrighted?
- Was there any trademark associated with the design?
- Was any information provided by AI on how to obtain the appropriate permission for use of the design?
This simple example shows the importance of having someone on each project team knowledgeable of the implications of AI. Project teams must be educated in data and information confidentiality and security issues when using AI material for product development. People such as authors, musicians, photographers, software development professionals, and others create intellectual property from which they expect to receive royalties and other forms of compensation. Neglecting to consider compensation for intellectual property rights is an invitation for lawsuits.
The Need for Government Intervention
Organizations in both the public and private sectors, as well as the general public, have already recognized the immense risks of improper use of AI and are asking for federal regulatory agencies to take the lead in establishing laws that clearly define the correct and incorrect use of AI. Some people argue that the use of AI will become so challenging that tight regulations will be required. Most people are unsure how this should be done because AI is still a work in progress but believe the best way would be the creation of a new federal agency just for AI issues as well as for licensing AI technology.
Most people know that, as of right now, it will be expensive to file a lawsuit regarding the use of AI. Given the lack of regulation, many AI challenges are setting new precedents now. This is one of the reasons people are hoping for a new federal agency to establish regulations that would make it easier for individuals and companies to file lawsuits against AI developers and users of AI for harm brought to the creators of the intellectual property. What seems certain in the minds of many is that, once the lawsuits begin, there will be a possible explosion in the number of lawsuits.
Not everyone agrees on what constitutes misuse of AI by a project team. Some people believe that AI opens the door for massive lawsuits. Others are arguing that the use of AI is totally legal and that AI lawsuits are doomed to fail. This is particularly true if, for example, the entire design of a new product was created solely by AI.
One of the serious questions facing legal experts is whether a company can copyright a product that was created with the use of AI. The answer seems to depend upon how much involvement the project team had in the design compared to simply duplicating what came from AI.
Copyrighting deliverables created by computer is open to interpretation. In the United Kingdom, deliverables created entirely by computer can be copyrighted. However, the European Union is considering the development of laws outlining ethical use of AI. In the United States, deliverables created entirely by computer cannot be copyrighted. However, some are arguing that copyrighting deliverables in the United States may be possible if, in addition to the use of AI, there was a significant amount of human input into the creation of the deliverable.
Therefore, project teams might now be required to maintain detailed records on how many project hours were spent in creating a deliverable that would be subject to copyright. Transparency of source and process will be key, and perhaps AI will be able to back cast and validate the source and attribution of material.
Expected Changes
Most companies today are policing themselves on AI based upon feedback from customers and stakeholders, as well as abiding by existing laws. Companies that expect to be heavy users of AI in project management are already researching ways to compensate creators of the intellectual property taken from AI.
Project management organizations must plan for the activities that will be needed to manage AI efforts in a politically, legally, and ethically acceptable manner. The PO for Ethical AI must accept responsibility for:
- Ensuring that the company has the necessary rights or licenses to use the information
- Ensuring that the information collected will be used in accordance with state, federal, and international laws and regulations
- Validating that copyright infringement is not happening and that the information has not been registered with the Copyright Office
- Validating that information provided is not coming from phantom sources
- Ensuring that the company and its customers will not be exposed to lawsuits or licensing obligations
- If licensing obligations exist, making sure that the owners of the intellectual property are compensated fairly
- If possible, examine any unintended or unethical consequences that may result from improper use of AI
- Ensuring that the organization has sufficient insurance coverage in place as protection for liability claims
- Ensuring company policy exists in relation to ethical requirements for AI sourcing, development, use and human employee replacement
A Peek Into the Future
In conclusion, the imperative for incorporating ethical AI practices into project management methodologies is plain. As the potential of AI to evolve project implementation becomes increasingly evident, the critical query revolves around the formation of guiding principles. The prospect of Ethical AI evolving into a distinct knowledge area within the PMBOK® Guide is a tangible reflection of its growing significance, likely to be embraced by forthcoming project manager training programs.
There is a clear opportunity for professional associations linked with project management, business analysis, and change management to proactively integrate an ethical AI stance within their well-established standards and codes of practice. This proactive step aligns with the narrative of this article, emphasizing the existence of inherent risks when engaging AI technologies. While leveraging AI for refining tools, techniques, checklists, and templates remains a viable trajectory, prudent caution is warranted when AI becomes entwined with project design considerations, possibly exposing the organization to unacceptable risks.
As the digital landscape continues to evolve, the future cooperative relationship between ethical AI and project management needs to balance risk and innovation, ensuring that the ethical dimensions are not overshadowed by the allure of technological advancement. The future evolution of project management will rest on our ability to seamlessly weave AI-driven efficiency with ethical, sustainable, and responsible project management practices.
About the Authors
Dr. Harold D. Kerzner, Ph.D., is Senior Executive Director at the International Institute for Learning, Inc., a global learning solutions company that conducts training for leading corporations throughout the world.
He is a globally recognized expert on project, program, and portfolio management, total quality management, and strategic planning. Dr. Kerzner is the author of bestselling books and texts, including the acclaimed Project Management: A Systems Approach to Planning, Scheduling, and Controlling, Thirteenth Edition. His latest book, Project Management Next Generation: The Pillars for Organizational Excellence, co-authored with Dr. Al Zeitoun and Dr. Ricardo Viana Vargas, delivers an expert discussion on project management implementation of all kinds.
