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Risk Matrix — Use Case × Risk Taxonomy 2026 × Likelihood

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3–6 hours per use case; 2–3 days for full portfolio review

STR-03 · Risk Matrix — Use Case × Risk Taxonomy 2026 × Likelihood

Purpose

Provide a systematic, repeatable framework to evaluate AI adoption opportunities in legal functions by quantifying risk across five weighted dimensions and mapping each use case to Risk Taxonomy 2026. The matrix produces a composite risk score (Weighted Impact × Likelihood), applies supplemental modifiers, and converts the result into clear governance actions and adoption recommendations.

Use cases with scores ≥10.0 (High Risk) automatically generate GOV-03 Risk Register entries and require STR-07 AI Task Force approval before implementation or material change.

When to Use

  • Before any new AI pilot or production deployment
  • During quarterly risk reviews for active AI use cases
  • During annual strategic planning and portfolio reprioritisation
  • Whenever a Risk Taxonomy 2026 class is affected by a material change (e.g. new regulation, new vendor, new use case category)

Metric 0: AI BoM Pre-Assessment

Complete the AI Bill of Materials (AI BoM) checks before scoring any use case. An incomplete AI BoM invalidates STR-03 results.

| AI BoM Check | Status | Action if Incomplete |

|—|—|—|

| All approved AI tools registered in AI BoM | | Complete AI BoM inventory via STR-07 AI Task Force |

| Shadow AI survey completed (USE-05 Metric 0) | | Run USE-05 Shadow AI baseline before proceeding |

| All vendors under evaluation have provided AI model inventory | | Require AI model inventory per VEN-01 Pass/Fail Criterion 1 and VEN-02 Section 3 |

| Agentic Tier AI in use identified and flagged | | Mark agenticTier: true in AI BoM; apply +2 risk modifier in Section 3 |

Section 1: Five-Dimension Risk Framework

The composite weighted impact score combines five dimensions, each mapped to one or more Risk Taxonomy 2026 canonical classes.

| Dimension | Weight | Primary Risk Taxonomy 2026 Class(es) | Scale |

|—|—|—|—|

| D1: Legal and Professional Responsibility | 35% | Class 2: Privilege and confidentiality; Class 3: Bias and fairness | 1 (Minimal) → 5 (Critical) |

| D2: Technical and Operational | 25% | Class 1: Hallucination and accuracy; Class 9: Operational resilience | 1 (Minimal) → 5 (Critical) |

| D3: Regulatory and Compliance | 20% | Class 7: Regulatory compliance drift; Class 4: Privacy and data protection | 1 (Minimal) → 5 (Critical) |

| D4: Security and Privacy | 15% | Class 4: Privacy and data protection; Class 2: Privilege and confidentiality | 1 (Minimal) → 5 (Critical) |

| D5: Reputational and Business | 5% | Class 6: Shadow AI; Class 5: Supply chain and vendor dependency | 1 (Minimal) → 5 (Critical) |

Composite Weighted Impact Score

(D1 × 0.35) + (D2 × 0.25) + (D3 × 0.20) + (D4 × 0.15) + (D5 × 0.05)

Supplemental Risk Taxonomy 2026 Modifiers

Four canonical classes are assessed as +1 modifiers to the Composite Impact Score when the condition is met.

| Class | Trigger | Modifier |

|—|—|—|

| Class 3: Bias and fairness | Vendor has no documented bias testing protocol | +1 |

| Class 5: Supply chain and vendor dependency | Vendor sub-processor list not disclosed or data portability not contractually guaranteed | +1 |

| Class 6: Shadow AI and policy circumvention | Shadow AI usage detected for this use case category at USE-05 baseline | +1 |

| Class 8: IP and licensing | Vendor IP ownership terms for AI-generated outputs not explicitly documented in DPA | +1 |

Dimension 1: Legal and Professional Responsibility (35%)

Score 1–5 based on:

  • Attorney–client privilege violations or waiver risk
  • Professional malpractice exposure from AI errors
  • ABA Model Rules and state bar ethical compliance (Rules 1.1, 1.6, 5.3, 3.1, 1.5)
  • Client consent and disclosure requirements (GOV-06)
  • Work product and confidentiality protections
  • Competence and supervision requirements

Dimension 2: Technical and Operational (25%)

Score 1–5 based on:

  • AI hallucinations producing false or misleading information (Class 1)
  • System downtime affecting critical legal processes (Class 9)
  • Data quality issues leading to poor AI performance
  • Vendor dependency and potential lock-in (Class 5)
  • Model drift and performance degradation over time (Class 1)

Dimension 3: Regulatory and Compliance (20%)

Score 1–5 based on:

  • EU AI Act requirements for high-risk AI systems (Class 7)
  • GDPR and state privacy law exposure from AI data processing (Class 4)
  • US state AI disclosure and bias audit requirements (Class 7)
  • Court rules regarding AI usage in litigation (Class 7)
  • ABA guidance and state bar ethics opinions on AI (Class 7)

Dimension 4: Security and Privacy (15%)

Score 1–5 based on:

  • Client data exposure through AI processing or storage (Class 4)
  • Unauthorised model training on confidential information (Class 2)
  • Cross-client data contamination or leakage (Class 2)
  • Shadow AI creating unmanaged security risks (Class 6)
  • Third-party vendor data handling practices (Class 5), mitigated by DAT-03 DPA execution

Dimension 5: Reputational and Business (5%)

Score 1–5 based on:

  • Client confidence erosion from AI failures (Class 9)
  • Competitive disadvantage from poorly implemented AI (Class 5)
  • Talent attraction and retention challenges (Class 6)

Section 2: Likelihood Assessment

Final Risk Level = Adjusted Composite Impact Score × Likelihood Score

| Likelihood Score | Probability (12 months) | Indicators |

|—|—|—|

| 5 — Very High | 90–100% | Experimental tech; unvetted vendor; no governance; no legal track record |

| 4 — High | 60–89% | Emerging tech; limited legal adoption; evolving regulation |

| 3 — Moderate | 30–59% | Established tech; some legal implementations; standard controls |

| 2 — Low | 10–29% | Mature tech; proven legal applications; governance frameworks established |

| 1 — Very Low | 0–9% | Well-established tech; deep legal expertise; advanced monitoring |

Likelihood is informed by:

  • Technology maturity (40%)
  • Vendor and market risk (25%)
  • Implementation complexity (20%)
  • Regulatory environment (10%)
  • Organisational readiness (5%)

Section 3: Use Case Risk Profiles and Decision Rights

Key Takeaways

  • Quantify AI use case risk using a five-dimension weighted impact score plus likelihood.

  • Map every use case to all relevant Risk Taxonomy 2026 classes, including supplemental modifiers.

  • Enforce AI BoM and Shadow AI baselines as prerequisites for valid risk scoring.

  • Route High and Very High risk use cases to STR-07 and Board governance with mandatory GOV-03 entries.

  • Apply Agentic Tier modifiers and controls for autonomous AI executors.

  • Use the worksheet and dashboard to maintain a living, auditable AI risk register.

  • Generate DPS-grade defensibility evidence for regulators, clients, and insurers.

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Module Details

Type

Pillar

P1

Duration

3–6 hours per use case; 2–3 days for full portfolio review

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