Artificial Intelligence

While the transformational power of artificial intelligence will improve efficiency for many businesses across many industries, it comes with risks. Harris Beach Murtha’s AI team helps clients navigate the legal, ethical, regulatory and business challenges raised by artificial intelligence so they can innovate safely and with confidence.

Whether it is developing AI products, using off the shelf customer-facing AI tools or using AI internally, Harris Beach Murtha’s AI attorneys rely on deep technical fluency and legal acumen to help clients traverse this bourgeoning landscape. Our AI practice is designed to help seize opportunities, manage risk and stay ahead of emerging regulations in areas like data privacy, IP, contracts, employment law, corporate governance, financing and litigation.

With multidisciplinary experience in law, technology and business, our track record of helping clients implement ethical and sustainable AI practices has resulted in competitive advantage in this rapidly evolving area.

Whether you need help reviewing a SaaS agreement from an AI vendor, or you are an AI vendor and need help drafting or touching up your existing agreements, Harris Beach Murtha can help. We draft, review and negotiate contracts that protect the interests of AI providers, users and integrators — ensuring appropriate warranties, liability limits, intellectual property rights, data ownership, usage rights, transfer restrictions, privacy obligations and risk allocation.

AI is under increasing regulatory scrutiny at both national and international levels — rules around bias, transparency, data protection, safety, industry-specific mandates and emerging AI-specific legislation are proliferating. We advise clients on designing, implementing and maintaining compliance programs that align with relevant laws and standards. Our work includes assessing risk under data privacy laws, consumer protection laws and civil rights laws, as well as sectoral or international regulatory regimes. We also monitor regulatory developments, interface with regulators and help clients prepare for audits, regulatory filings or investigations.

Protecting innovations in AI requires understanding what is — and isn’t — protectable: models, algorithms, training data, user interface, AI-generated works, etc. We work with clients to develop IP strategy tailored to AI, including patents (where possible and strategic), copyrights and trade secrets, licensing approaches, enforcement, IP due diligence and freedom-to-operate analysis. We help you secure, defend, maintain and commercialize your AI-driven innovations.

Deploying AI responsibly and sustainably depends on strong internal governance. We assist companies in drafting and implementing AI policies covering ethics, fairness, transparency/explainability, model monitoring, safety, risk management, internal audits, vendor/third-party oversight, data usage, bias mitigation, documentation, record-keeping and accountability. These policies help reduce legal risk, foster trust with stakeholders (customers, regulators and the public), and support compliance with evolving local, state and federal laws and standards.

The rapid proliferation and adoption of AI technologies has led to a surge in venture capital and early-stage financing opportunities for our clients. From seed-stage founders raising capital in the AI industry, to larger venture-backed Series A and Series B entities, we advise clients on the appropriate legal structures and transactional frameworks to mitigate risk and optimize success in the competitive AI landscape. This includes developing mission-critical corporate, contractual and IP strategies for founding teams, Board members, angel investors and institutional investors deploying capital in the AI sector.

Harris Beach Murtha helps companies identify and secure government incentives that support constructing new facilities, innovation and growth, including data centers. Our team negotiates tax credits, state and local tax abatements and exemptions, cash grants and infrastructure support packages from state and local governments, often tied to job creation and capital investment benchmarks. We guide clients through complex application processes, including those involving New York State’s Excelsior Jobs Program, Industrial Development Agency benefits and Brownfield Cleanup incentives, among others. By partnering with our clients from site selection through compliance reporting, we help maximize public-private partnerships to align with long-term strategic plans.

The energy sector is undergoing a technological transformation, with AI playing a central role in grid optimization, load forecasting and renewable energy integration. At that same time, AI and related data centers are adding significant loads to already strained electric grids, rising a host of legal issues, such as interconnection rights and obligations and cost allocation for new or expanded electric facilities. We help data center developers secure the massive and reliable power supply required for AI's intensive computational demands. This includes negotiating interconnection and other related agreements, advising on cost allocation issues with utilities related to serving a data center’s electric load, and securing incentives, such as through a demand response program or state-driven energy-efficiency programs.

Artificial intelligence is revolutionizing health care delivery, from diagnostic tools and drug discovery platforms to support for clinical decisions and automation of administrative duties. We advise hospitals, digital health startups and life sciences companies on how to navigate the regulatory landscape, including HIPAA privacy compliance. As payers, providers and developers increasingly rely on machine learning models, we help clients structure defensible risk frameworks, negotiate compliant technology contracts and ensure that innovation aligns with patient safety and regulatory expectations.

In transactions involving AI companies, or companies whose value depends on AI systems, there are special due diligence issues, including model provenance and performance, data sets, algorithmic risk, compliance with applicable laws, ownership of IP, potential liabilities (contractual, regulatory or under litigation), talent retention and third-party relationships. We help buyers and sellers of AI technologies navigate these areas when structuring M&A deals, defining bespoke representations and warranties, negotiating purchase or investment terms and planning for post-acquisition integration of AI assets or teams.

As AI systems become embedded in business operations, litigation risk increases — from product liability, algorithmic bias claims, discrimination, regulatory enforcement actions, class actions, trade secrets misappropriation and potential intellectual property disputes. Our litigators are experienced in both defending and prosecuting these types of claims, advising on admissibility of AI-based evidence, and navigating technical expert testimony. We also provide pre-litigation counseling to help clients anticipate and mitigate exposure, including through insurance, documentation and internal policies.

The intersection of AI with employment law raises both opportunities and risks, Use of AI in hiring or promotion (screening, resume sorting, assessments), monitoring of employees, automation of certain roles or even AI tools in performance evaluation can trigger inadvertent equal employment compliance risks (e.g. bias/discrimination), privacy concerns or contractual issues. Harris Beach Murtha’s AI attorneys advise employers on deploying AI tools compliantly, designing and implementing employment policies around AI, defending against employment-related claims, negotiating workforce transitions and managing the legal implications.

AI innovation is driven by global talent, and companies at the forefront of the industry often rely on engineers, researchers and technical founders from around the world. We assist clients in structuring immigration and mobility strategies that support AI workforce growth. From preparing O-1 and H-1B petitions to long-term permanent residence planning for professionals, our attorneys help clients navigate the U.S. immigration system efficiently and compliantly. We also advise on the immigration implications of M&A, venture funding and global expansion, and address export control and compliance considerations when foreign nationals access sensitive AI technologies.

When concerns arise — whether internal whistleblower reports, regulatory probes or legal claims — we help lead or respond to investigations. The possibilities of misusing AI systems are great, including data misuse, algorithmic bias, model failures, unintended harms and privacy invasions. Harris Beach Murtha helps with preserving evidence (code, data, logs and models), conducting internal audits, advising on disclosure obligations and responses to regulators, defending or negotiating enforcement actions and handling liability mitigation. We aim to help clients uncover root causes and remediate issues while managing legal exposure.

AI-driven ventures often require specialized legal support when seeking investment or raising capital. We advise startups and growth‐stage companies (or investors) on structuring financing rounds, investor due diligence for AI technology, valuation issues tied to AI assets, intellectual property, licensing, contractual obligations, regulatory risk and exit strategies. For investors, we help inform their investment decisions and terms by performing risk assessments rooted in AI technology, including reviewing data assets, model development practices, regulatory compliance and potential liabilities.

State legislatures and regulatory agencies are rapidly adopting rules governing how artificial intelligence may be used by public bodies and in the electoral process. We counsel municipalities, counties and other local government entities on understanding and complying with these evolving state-level AI mandates, including procurement requirements, transparency obligations, record-keeping and risk-management practices for AI systems used in government operations. Our team also can assist political candidates, campaigns and election committees on the responsible use of AI in advertising, voter outreach and communications, ensuring compliance with election laws, disclosure rules and restrictions on automated content. By combining municipal law, election law and cutting-edge AI expertise, we help public sector and political clients implement innovative technologies while meeting their legal obligations and maintaining public trust.

We advise debtors, lenders and acquirers on workouts, wind-downs and bankruptcy matters involving AI companies, including structuring asset sales under Section 363, securing Debtor-in-Possession (DIP) financing and handling disputes over data ownership and IP licensing. Our restructuring attorneys understand the unique operational dynamics of startups and help maximize value and reduce litigation risk through strategic planning and execution. We also counsel creditors on how to protect their interests in technology-forward companies.

Our attorneys advise on the environmental risks posed by energy-intensive AI infrastructure, such as large-scale data centers, and assist in NEPA and SEQRA reviews. By bridging technical innovation with sound environmental compliance, we help clients avoid pitfalls and move forward confidently.

As AI companies expand operations and infrastructure, they face complex real estate challenges tied to site acquisition, leasing, permitting and facility development. We represent technology-forward companies in their efforts to secure physical space for labs, data centers, R&D hubs and corporate headquarters. Our attorneys advise on every phase of the process — from negotiating leases for high-demand urban properties to acquiring land for energy-intensive infrastructure projects. We help clients navigate zoning laws, environmental review and local permitting requirements, ensuring alignment with both operational needs and regulatory obligations. Our team also works closely with clients to coordinate incentives, construction agreements and facility buildouts, providing end-to-end counsel tailored to the unique real estate demands of our clients.

Team Leader(s)

Brendan M. Palfreyman

Member

(315) 214-2161

bpalfreyman@harrisbeachmurtha.com

Team

Colin T. Barrett

Associate

(315) 214-2059

wwolfe@harrisbeachmurtha.com

Advised international manufacturing company regarding its internal AI governance policy.
Advised international marketing agency and leading photo editor software company regarding SaaS contracts with generative AI vendors.
Advised tech support/software company regarding AI and copyright issues.
Advised employer on wage-and-hour and EEO/non-discrimination issues in using AI application to review personnel performance.
Advised employer on confidentiality and privilege issues with respect to AI-generated meeting minutes/notes in confidential workplace investigations.
Advised employer on reduction-in-force and WARN Act risks/compliance where position eliminations linked to possible AI replacement.
Advised employer on use of AI tool in reviewing job applications.
Reviewed and drafted of AI Policy for company’s Employee Manual/Employee Handbook.
Represent Series B founding and executive team building global Artificial Intelligence, Machine Learning and HR suite technology platform from $40 million financing to private equity exit.
Advise Series B automated employment assessments platform, servicing Fortune 500 companies, on compliance and enforcement issues related to NYC Local Law 144, and similar municipal, state and federal regulations governing the use and deployment of Automated Employment Decision Tool (“AEDT”) technologies, requiring increased algorithmic transparency, reporting and regular AI audits.
Represent Series A founding team in Software-as-a-Service, Robotics and Hospitality sector, developing proprietary AI systems and automated POS platform for large restaurant groups from $15 million financing to public company exit.
Represent Seed stage founding team building Artificial Intelligence platform for technology asset management on $1 million angel financing and seed round, including advising on equity incentive plans, capitalization table management, investment and board of director issues.
Represent Series A founding team building Artificial Intelligence powered media sales platform on corporate governance, employment and IP related matters, closing $5 million ventured backed capital financing round.
Advised data center developer on securing electricity from its local transmission utility, including on the cost allocation for the related electric facilities under the utility’s tariff.
Advised data center owner on the process and cost-allocation issues related to the facility tripling its electric load. Here, this process included the New York Independent System Operators, Inc.’s (NYISO) interconnection process for large load projects in New York and contract negotiation of agreements with the local transmission utility.
Drafted privacy policies, terms of use and cross-border data transfer for AI systems that use, store and potentially share sensitive personally identifying information.
Developed terms of use and data sharing agreements to allow one company to use the information stored by one AI platform to train another company’s AI technology.
Developed user consent and waivers for AI training technology that could be intense or disturbing.
Developed HIPAA consent for AI translation services used to facilitate conversations with non-native speaking patients.
Developed security plans for organizations that process sensitive personally identifying information using generative AI.
Advised large educational company on AI governance policy creation, regulatory compliance and FERPA.
Advised real estate and affordable housing-focused company on risk mitigation with bias in data, usage and policy creation.
Counseled a real estate developer on AI integration and adoption.
Advised leading automotive robotics and AI manufacturing company on global mobility and intracompany transfers under the B-1, H-1B and L-1 visa programs.
Advised AI start-ups on immigration strategies to attract and retain global AI talent, including O-1A, EB-1A, and NIW filings for AI engineers and researchers.
Advised video game publishers integrating AI-driven animation and NPC behavior systems on immigration strategies for international game developers, artists, and AI engineers supporting interactive media innovation.
Developed immigration compliance program for multinational AI solutions provider, covering I-9, E-Verify, and remote workforce protocols.
Advised global AI chip manufacturer on visa planning for foreign national engineers involved in semiconductor and neural network hardware design.
Teaching, publishing and speaking on the topic of ethical use of AI.

Artificial Intelligence

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