The growing importance of generative AI (genAI) policy development for legal counsel in enterprises cannot be understated. General counsel must take proactive steps to establish effective genAI guidelines. These measures are not only crucial for current operations but also prepare organizations for potential future legal regulations.

Key Focus Areas for genAI Policy:

1. Risk Tolerance Alignment: Legal leaders should engage in discussions with senior management to determine the enterprise's risk appetite, specifically regarding "must-avoid outcomes." This process involves assessing the potential applications of genAI and understanding the balance between risks and benefits.
2. Use Cases and Restrictions: It's essential for legal teams to collaborate with other department leaders to understand how genAI could be utilized across the business. A risk-based classification of use cases should guide the application of controls, ranging from manager approvals to outright prohibitions, depending on the risk level.
3. Decision Rights and Risk Ownership: General counsel and executive leadership need to establish clear decision-making authorities and responsibilities for genAI use. This includes documenting the enterprise unit responsible for AI governance and ensuring employees are aware of the approval processes for various use cases.
4. Disclosure Policies: Transparency in the use of genAI is a key tenet, especially as global standards evolve. Organizations should disclose their use of genAI technologies to both internal and external stakeholders. This includes labeling genAI-influenced outputs and considering technical measures like watermarking for AI-generated images.

The necessity of these policies is underscored by the potential for employees to bypass restrictions by using personal devices. Thus, overly restrictive policies won't work. Instead, build a balanced approach that delineates acceptable uses and incorporates basic safeguards.

Overall, these recommendations serve as a critical roadmap for legal professionals navigating the complexities of genAI in the corporate environment.