Attorney and legal ethics speaker Stuart Teicher will present “Shakira, Secrets and Scandals: Attorney Ethics and the World of Offshore Deals” on July 17. The one-hour webcast will explore the ethical pitfalls surrounding high-profile offshore financial schemes. Drawing on revelations from the Panama, Pandora and Paradise Papers, the session will examine legal and professional conduct issues tied to tax avoidance, asset protection and the role of attorneys in questionable financial structures. Topics will include lawyer supervision, responsibility for nonlawyer staff, confidentiality, advising on unlawful conduct and duties of candor and truthfulness. For more information and to register visit the TBA website.

The Tennessee Department of Disability and Aging (DDA) announced this month it is accepting applications for competitive grant awards for senior centers. State lawmakers have approved $5 million of one-time funding to assist these centers in providing access to resources, activities and social connection. Organizations can apply for grants ranging from $10,000 to $50,000 to cover certain marketing expenses, programming and routine operating expenses, excluding staff salaries. To qualify, the center must be a single-purpose agency with programs operated for the benefit of adults aged 60 and over, an organization with programming that provides a minimum of 16 hours a month of services or activities for adults 60 and over, or a multi-purpose agency that includes services and recreational facilities for adults aged 60 and over. Applications are due by Aug. 8 at 4 p.m. CDT and funding must be spent by March 31, 2027.

AARP announced last week it will award several Tennessee organizations with grants to assist with various projects for older adults. This comes as part of the association’s Community Challenge program, where recipients are allotted funds to improve public space, transportation, housing, digital connections and other concerns for seniors. Tennessee beneficiaries include Crossville to refurbish Veterans Memorial Park furthering ADA compliance, Lawrenceburg to fund a mobile mini golf course, Jackson to build accessory dwelling units (commonly called “mother-in-law” suites) and Stanton to improve walkability in the city. Memphis will receive funding for three projects including money to help seniors implement home modifications for safety and accessibility, create emergency planning classes and provide disaster kits for older adults and to improve walkability in Renaissance Pocket Park. Since 2017, the AARP Community Challenge has awarded more than $353,000 to 41 organizations across the state. WBBJ Jackson has more.

The July 25 TBA Elder Law Forum will feature a session on IRAs and Medicaid annuities. Expert financial advisor David Currie of Krause Financial will lead a discussion on spenddown strategies, structuring annuities, transfer taxes and more. Currie’s session will also include case studies and practical illustrations to ensure attendees grasp the essentials of this complex topic. Other topics at the forum include undue influence, Medicaid/TennCare, VA benefits and ethics. Elder Law Section members receive a discounted rate to attend. Learn more and register here.

Artificial intelligence (AI) is reshaping business law practices by streamlining contract drafting, enhancing due diligence and improving compliance monitoring. For law firms, AI offers significant efficiency gains but also raises ethical considerations under the Tennessee Rules of Professional Conduct (TRPC). This article explores AI’s applications, its impact on Tennessee’s legal landscape and the ethical obligations attorneys must navigate to ensure responsible use, while cautioning against over-reliance.

AI tools, such as those from Thomson Reuters’ CoCounsel, automate the drafting of standard legal documents like non-disclosure agreements and service contracts, reducing drafting time from hours to minutes. These tools use pre-designed templates and natural language processing to generate precise, enforceable clauses tailored to client needs. For example, a corporate law firm might use AI to produce initial drafts of commercial contracts, allowing attorneys to focus on strategic customization. AI also analyzes contracts for inconsistencies or compliance issues, minimizing errors. A 2024 Thomson Reuters report notes that AI can save lawyers up to four hours per week on such tasks, potentially generating $100,000 in new billable time annually per lawyer[1].

In due diligence, AI platforms like Luminance Diligence and DealRoom AI excel at processing vast document sets, extracting critical information and flagging potential risks. For mergers and acquisitions, these tools analyze financial records and contracts swiftly, identifying problematic clauses or regulatory concerns. A firm handling a corporate acquisition could leverage AI to review thousands of documents in hours, a task that traditionally took days. This efficiency enhances accuracy and reduces costs, as noted in a 2025 study by the Harvard Law School Center on the Legal Profession, which highlights AI’s role in improving client outcomes[2].

AI aids compliance by continuously tracking regulatory changes and assessing their impact on business operations. Tools like ContractPodAi monitor updates to corporate governance laws, alerting legal teams to adjust strategies proactively. For instance, AI can analyze past case law to predict compliance risks, enabling firms to mitigate liabilities. A 2024 ContractPodAi study found that 51% of in-house legal professionals report leadership encouraging AI use for compliance, underscoring its growing adoption[3].

However, AI in the legal field must be implemented with caution and in compliance with all ethical rules. Tennessee’s Rules of Professional Conduct impose strict ethical obligations on attorneys using AI, particularly in competence, confidentiality and supervision. Rule 1.1 requires attorneys to provide competent representation, including understanding the benefits and risks of relevant technology. Tennessee adopted the ABA’s technology competence amendment in 2017, making it one of 27 states emphasizing this duty[4]. Attorneys must grasp AI’s limitations, such as potential inaccuracies or “hallucinations” (false outputs) and verify AI-generated work. For example, an attorney using AI for legal research must cross-check citations to avoid errors, as seen in cases like Mata v. Avianca, where attorneys were sanctioned for submitting AI-generated fictitious case law[5].

TRPC Rule 1.6 mandates protecting client information. Using public AI tools like ChatGPT risks breaching confidentiality, as these platforms may retain or share input data. Firms using AI must use secure, SOC2-compliant tools like Paxton or Transcript Genius, which do not store client data post-session. Attorneys should review AI vendors’ terms of service to ensure data security and obtain client consent if confidential information is involved, as advised by the ABA’s Formal Opinion 512[6].

TRPC Rule 5.3 requires attorneys to supervise non-lawyer assistants, including AI systems, to ensure compliance with ethical standards. Firms must establish policies for AI use, train staff, and monitor outputs. For instance, a firm might create a protocol requiring attorneys to review AI-drafted contracts for accuracy before client submission. The New York State Bar Association’s 2024 AI Task Force report recommends dedicated oversight teams to enforce such policies [7].

Over-reliance on AI poses risks, including diminished professional judgment and undetected biases in AI outputs. A Texas attorney was fined $2,000 in 2024 for submitting AI-generated fictitious citations, highlighting the need for human oversight[8]. Attorneys should treat AI as a tool, not a replacement, for legal reasoning. Regular training, clear AI policies and rigorous output validation are essential to mitigate these risks.

AI is revolutionizing business law by enhancing efficiency in contract drafting, due diligence and compliance monitoring. However, adherence to TRPC’s ethical standards— competence, confidentiality, and supervision — is critical. By implementing robust policies and maintaining human oversight, attorneys can harness AI’s benefits while upholding professional responsibilities, ensuring client trust and legal integrity in an AI-driven era.

Tommy Fridy is a corporate associate in the Memphis office of Wyatt Tarrant & Combs, LLP. He assists with counseling clients regarding mergers, acquisitions, dispositions and provides operational, regulatory and general transactional support. His practice also includes the development, leasing, acquisition and disposition of commercial real estate and lending.

[1] How AI is transforming the legal profession (2025)

Legislative changes made earlier this year in Delaware’s venerable corporate law (which include amendments to the laws governing conflicting interest transactions and books and record requests that were the subject of one of our annual Business Law Forum sessions this spring) have begun to affect business law practice and client behaviors. A recently filed complaint, as some of you may have heard, has generated interest in the bar for its creative approach. That approach, however, raises questions about the internal affairs doctrine applicable to business entity cases and controversies.

The internal affairs doctrine essentially provides that matters involving the internal affairs of a legal business entity are governed by the law of the state of organization. So, for a Delaware corporation, Delaware corporate law would govern disputes relating to its internal affairs. But there always have been questions as to the boundaries of internal affairs. For example, are third-party liability claims, which are expressly addressed in business entity law through the codification of agency law principles (and sometimes related liability and litigation rules) in statutes and decisional law, internal affairs matters?

In Juul Labs, Inc. v. Grove, 238 A.3d 904 (2020), the Delaware Court of Chancery ruled that a Delaware corporation with its principal place of business in California could not demand corporate books and records under California’s corporate books and records law. In that opinion, Vice Chancellor Laster simply concluded: “The Company is a Delaware corporation. Under principles articulated by the Supreme Court of the United States and applied by the Delaware Supreme Court, Delaware law governs its internal affairs. The scope of Grove’s inspection rights is a matter of internal affairs, so Delaware law applies.”

A recent cause of action brought by the National Center for Public Policy Research (NCPPR) against United Airlines in an Illinois court, National Center for Public Policy Research v. United Airlines Holdings, Inc., raises the same issue. My co-blogger at the Business Law Prof Blog, Ann Lipton, describes the case succinctly in a recent post.

United Airlines is incorporated in Delaware, but it is headquartered in Illinois. NCPPR, as the owner of 123 United Airlines shares, has sued the company in Illinois, alleging that under Illinois’s inspection statute, it is entitled to internal records regarding United’s decision to limit flights to Tel Aviv. NCPPR is explicitly choosing not to seek inspection under Delaware law, on the ground that the changes to Delaware’s inspection statute wrought by SB 21 would make such a demand futile. Instead, NCPPR argues that inspection rights are outside the scope of the internal affairs doctrine, and therefore United is subject to Illinois’s inspection statute.

I urge you to read Ann’s post for a fulsome analysis. She is an insightful lawyer with a strong litigation background and scholarly record.

One might wonder why, given the Court of Chancery’s ruling in Juul, NCPPR would bring this action. Several important facts (other than distinctions in the substantive motivations for the plaintiffs’ claims in the two cases) make the United case interesting and potentially important, even in the wake of Juul. As I noted above, the Delaware corporate law on books and records demands was recently amended to narrow its scope. See, e.g., law firm posts here and here. Among other things, the revised statute narrows the scope of books and records that may be the subject of a demand and establishes new procedural requirements for stockholder litigants seeking books and records under the statute. The United complaint was filed in Illinois asserting the application of Illinois law to give NCPPR the best chances to argue for Illinois as the governing law considering both Juul and the recent Delaware law changes. As Ann has noted, the decision of the Illinois trial court is fraught with peril.  Others also have blogged about the case, including notably Stephen Bainbridge. If you are on Substack and have a paid subscription, you can find his most recent post (citing to earlier posts) here.

This is a case to watch. The Illinois court’s ruling is of importance to the application of the internal affairs doctrine in Delaware. But the case ultimately may also shed light on the new Delaware law governing corporate books and records requests and impact the interpretation of the corporate laws of other states, including Tennessee.

This article was contributed by Joan Heminway. She is the Rick Rose Distinguished Professor of Law at the University of Tennessee Winston College of Law, a corporate finance lawyer, and a past chair of the TBA Business Law Section.

Samantha McCaleb, a 2024 graduate of Belmont University College of Law, has been named a 2025-2026 Supreme Court Fellow. This prestigious and highly competitive award is given to only four fellows each year. The fellows gain experience at the highest level within the federal judiciary for the yearlong fellowship. Learn more about the Fellows Program and Samantha McCaleb.

The Knoxville Bar Association (KBA) Barristers will host a summer party on Aug. 8 from 6-8 p.m. EST at Boyd's Jig & Reel located at 101 S. Central St., Knoxville 37902. All KBA members and family are welcome to attend. Register early before July 25 to take advantage of a reduced registration fee.

The court received a petition for rehearing en banc. The original panel has reviewed the petition for rehearing and concludes that the issues raised in the petition were fully considered upon the original submission and decision. Judge Griffin would grant the petition for the reasons stated in his dissent to the court’s opinion of March 18, 2025. The petition was then circulated to the full court. Less than a majority of the judges voted in favor of rehearing en banc. Therefore, the petition is denied.