As generic legal AI tools flood the property market, sales agents are being told they can streamline contract reviews, speed up buyer decision-making, and reduce friction in campaigns.
But behind the marketing gloss sits a serious issue most agents haven’t yet considered – insurance.
According to BuySecure co-founder Richard Bootle, the rise of generic legal AI poses real risks for sales agents.
“Strictly speaking, legal advice can only be provided by a law firm,” he says.
“And when a law firm gives advice, that advice is covered by the firm’s professional indemnity insurance. That’s the safety net. Without it, clients are on their own.”
This is where the danger lies. Many of the new AI tools appearing in the market are not built or operated by law firms.
They analyse contracts, interpret clauses and tell buyers what they mean, which crosses a very clear legal line, Mr Bootle says.
“If an AI tool is telling a buyer what a clause means, that’s legal advice,” he says.
“If the provider isn’t a law firm, then strictly speaking they’re providing legal services illegally.
“And if they’re doing it illegally, they’re uninsured. If something goes wrong, there’s nowhere for the client, or the sales agent, to turn.”
And Mr Bootle says this is already happening.
“We’re seeing tools pop up that look slick, sound confident, and promise the world,” he says.
“But they’re untested, uninsured and operating outside the legal framework. Agents need to be very careful about recommending or relying on them.”
Even when a law firm is involved, he says, some are trying to distance themselves from responsibility by burying disclaimers in their terms and conditions.
“A disclaimer doesn’t magically remove a law firm’s obligations,” he says.
“If a law firm provides legal services, whether it’s through a lawyer or through an AI tool, those services must be covered by the firm’s insurance. That’s the law for lawyers.
“But some firms are trying to dodge that by pretending their AI isn’t actually giving legal advice.”
For sales agents, the implications are significant. That’s because if a buyer relies on an uninsured AI tool and later discovers an undisclosed risk, an unfair clause, or a contract defect, the fallout can land squarely back on the agent who recommended the tool to them, Mr Bootle says.
“In a market where buyers are more cautious and consumer protection is tightening, agents can’t afford to be casual about the legal tools they reference,” Mr Bootle says.
“Agents are trusted guides, so when they say, ‘Use this tool, it’ll help you understand the contract,’ buyers take that seriously.
“If the tool is dodgy, uninsured, or operating illegally, the sales agent is the one who wears the reputational damage.”
Mr Bootle says if a legal AI product isn’t delivered by a law firm and backed by proper insurance, it shouldn’t be anywhere near a property transaction.
He says this means the industry needs to shift its mindset.
“AI is here to stay, so that’s not the issue. The issue is whether the AI is operating inside the legal framework,” he says.
“If it’s not, it’s a liability. Sales agents should be looking for tools that are fully insured, fully compliant, and delivered by actual law firms and not tech startups pretending to be legal service providers.”
As legal AI becomes more embedded in the property ecosystem, he says the divide between compliant and non-compliant providers will widen.
“The tools backed by law firms will become part of the professional workflow,” he says.
“The uninsured ones will disappear but not before causing damage and potentially financial carnage for sales agents and consumers.”