The Customer Success Playbook

Customer Success Playbook S3 E68 - Gayle Gorvett - Who's Liable When AI Goes Wrong?

• Kevin Metzger • Season 3 • Episode 68

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When AI systems fail spectacularly, who pays the price? Part two of our conversation with global tech lawyer Gayle Gorvett tackles the million-dollar question every business leader is afraid to ask. With federal AI regulation potentially paused for a decade while technology races ahead at breakneck speed, companies are left creating their own rules in an accountability vacuum. Gayle reveals why waiting for government guidance could be a costly mistake and how smart businesses are turning governance policies into competitive advantages. From the EU AI Act's complexity challenges to state-by-state regulatory patchwork, this customer success playbook episode exposes the legal landmines hiding in your AI implementation—and shows you how to navigate them before they explode.


Detailed Analysis

The accountability crisis in AI represents one of the most pressing challenges facing modern businesses, yet most organizations remain dangerously unprepared. Gayle Gorvett's revelation about the federal government's proposed 10-year pause on state AI laws while crafting comprehensive regulation highlights a sobering reality: businesses must become their own regulatory bodies or risk operating in a legal minefield.

The concept of "private regulation" that Gayle introduces becomes particularly relevant for customer success teams managing AI-powered interactions. When your chatbots handle customer complaints, your predictive models influence renewal decisions, or your recommendation engines shape customer experiences, the liability implications extend far beyond technical malfunctions. Every AI decision becomes a potential point of legal exposure, making governance frameworks essential risk management tools rather than optional compliance exercises.

Perhaps most intriguingly, Gayle's perspective on governance policies as competitive differentiators challenges the common view of compliance as a business burden. In the customer success playbook framework, transparency becomes a trust-building mechanism that strengthens customer relationships rather than merely checking regulatory boxes. Companies that proactively communicate their AI governance practices position themselves as trustworthy partners in an industry where trust remains scarce.

The legal profession's response to AI—requiring disclosure to clients and technical proficiency from practitioners—offers a compelling model for other industries. This approach acknowledges that AI literacy isn't just a technical requirement but a professional responsibility. For customer success leaders, this translates into a dual mandate: understanding AI capabilities enough to leverage them effectively while maintaining enough oversight to protect customer interests.

The EU AI Act's implementation challenges that Gayle describes reveal the complexity of regulating rapidly evolving technology. Even comprehensive regulatory frameworks struggle to keep pace with innovation, reinforcing the importance of internal governance structures that can adapt quickly to new AI capabilities and emerging risks. This agility becomes particularly crucial for customer-facing teams who often serve as the first line of defense

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Kevin Metzger:

All right. Welcome back to the Customer Success Playbook podcast. I'm Kevin Metzger again. Robin is unable to join us, but we are continuing our conversation with Gail Vete, uh, fractional, uh, legal counsel and leading expert on AI governance. Gail, before we dive in. Let's let our audience get to know you a little bit better. You up for that?

Gayle Gorvett:

Sure.

Kevin Metzger:

What's one city, uh, you could see yourself living in that maybe you've lived in in the past or somewhere you'd wanna live in in the future?

Gayle Gorvett:

That maybe I wanna live in again? That's, yeah. I've lived a lot of places, so, um, I just got back from Paris and lived there for a long time and I don't know if I want to live there full time again. I. But I've thought about the idea of maybe getting a little kind of, um, pie there, um, for retirement to be able to go back and forth.

Kevin Metzger:

Nice.

Gayle Gorvett:

Yeah. Do

Kevin Metzger:

you speak French and Japanese? I believe

Gayle Gorvett:

I speak French fluently. Um, Japanese not so fluently. Um, at one point I knew 500 kanji. I cannot say that I know the 500 kanji anymore. Um, I, their Japanese has three different written alphabets, and I know the two that are used to translate foreign words, but my kanji has really slipped.

Kevin Metzger:

How did you get into that? I mean,

Gayle Gorvett:

I, I went to a school in Virginia when I was young that taught French very early, and I started going there at a later age, but I started studying French. At that at 12 and I continued and then I went to Europe to study a couple of times in high school and college. And I just became then very interested in, um, international business and studying languages. And while I was in college, the European Union was just really. Getting delayed in their, you know, unionizing, let's say. Um, so I thought, I think I need a different language if I really wanna do this international business. I decided to start studying Japanese'cause they seem to be the ones kind of pushing the, the economic ball forward in international business. So I started studying Japanese and then I went to work in Japan after I graduated. On the JET program,

Kevin Metzger:

what's a favorite book, uh, that you have?

Gayle Gorvett:

Oh, yeah. You know what? That's a great question. I love to read. I have not had a lot of time to read for pleasure lately. I, I will say, when I was really busy in New York and I needed to try to relax to calm down, after working a lot of hours, I read all the Harry Potters like. In a row, but that, I wouldn't say those are my F they're good, but those are not my favorite books. I love historical fiction and I love books like Memoirs of a Geisha. I recently read, oh, I'm trying to remember the name of the book. They made it into a mini series and now I can't remember the name of it. Oh, A Gentleman in Moscow. Oh, cool. That was a really good book.

Kevin Metzger:

Very cool. I like historical fictions as well. I tend to, I, I actually like a lot of the legal thrillers as well.

Gayle Gorvett:

Oh, do you like John GREs

Kevin Metzger:

stuff and all that? Yeah. Yeah. But I, I gotta imagine that probably isn't very relaxing for you.

Gayle Gorvett:

Well, it's kind of funny, you know,'cause it's so unrealistic.

Kevin Metzger:

Well, let's get back into the, uh, the realm of ai, which is, uh, where we're focusing these days. And when an AI system fails or causes unintended harm, how do we determine who's really accountable? What are the rules around that now? And now? How are you seeing that from a

Gayle Gorvett:

Well, I think we're still kind of figuring out what the rules around that are, and that's one of the reasons why. Having a good governance policy is so important and why it's a good idea to using innovations like AI is, is of course, you know, great, um, to help you in your work and to help you, you know, kind of, uh, do research and things like that, but also. If you're using this kind of technology to do something sensitive or to advance your business in an area that's of strategic importance, the question that you ask, it makes, uh, all the difference in terms of look before you leap because this is an area where in some, especially in the US for example, we don't have. Um, comprehensive regulation around this. Um, and there are states that do have AI regulation. California. We have some biometric regulation in Illinois and New York, um, and some other states have coming online with AI regulation. But in the past few weeks, the federal government has put forth. Legislation to pause state laws in AI for up to 10 years to give the federal government the time to enact comprehensive federal AI regulation. 10 years, huh? Yes. Yeah. To, we'll all have chips in our head and it will be completely irrelevant, so it makes it even more important to kind of, um, as much as you. As much as you can within the realm of possibility, do what we call, you know, sort of private, uh, regulation, which is obviously engaging in, uh, a good contract with a vendor or making, making sure that you read the terms and conditions of the service that you're using and making sure that you're comfortable with what they say. Um, so that, you know. Um, that you're not, um, putting data into an LLM that you know, is then going to be, become the, the of that, um, entity or being reused for training purposes, for example, or, you know, those types of things. Because right now, um, in the United States in particular, a lot of the, um, power is going to a lot of these companies as opposed to, um, the users of their technology. Um, you know, in the EU they've introduced E EU AI Act, um, which puts some guardrails around the use of ai, especially in the high risk, um, categories, which are biometric. Mass or mass use of areas where, um, they would automate gathering or scraping of data or personal data in a large way. Um, things like that. But they haven't fully rolled out the, um, EU AI act yet. And there is, um, talk of modification of the act and the act being, um, put paused because it's. Too complex and too burdensome. Um, so we're even seeing some, some, um, in other jurisdictions that already have regulation.

Kevin Metzger:

Yeah, I mean, it's interesting. Stuff is moving so fast. I have a question too, if I have, um, you know, a set of guidelines in place for my company.

Gayle Gorvett:

Yeah.

Kevin Metzger:

Does that provide any actual protection for me? Because I can show I'm using within the guidelines that we set, or is like, um, something goes sideways. Is it not necessarily provide protection?

Gayle Gorvett:

Well, I would say a couple things. If you're in a regulated industry. Unlike mine, for example, um, you may have a legal requirement to have guidelines. You may have a legal requirement to inform your customers of your use of ai. For example, in in the legal profession, the A BA, which is interesting because they're not. Um, the coercive ability over, um, lawyers, they have a sort of, you know, it's kind of like NIST or CISA on the federal level for security. They put out guidelines that become very strong suggestions, and the a BA, um, the American Bar Association is a federal, you know, bar association, but. Uh, the legal profession is regulated by the states, so they put out these sort of blanket, you know, statements that are not coercive, but then they become adopted in, in different forms by individual states. And what they've said is. You know, lawyers who are using ai, um, have a duty to disclose that to their clients and they have a duty to become technically proficient in ai. Um, and, uh, you know, I would say you should use it as an opportunity to communicate with your customers and instead of waiting for there to be a law to that compels you. To create a, a guideline or, or a governance policy. Use it as a way to be the first adopter in your industry Having a governance policy. It is good business. It's also, you know, good common sense because you don't want your, your, your employees doing whatever they want, right? You want to be the one who sets the tone. For your employees, you wanna be the one who sets the rules. And then you also want your customers to know that you're responsible with their information. You want them to know that you care about their information. And so in some circumstances, yes, it can, you know, put you in a better legal footing. It can provide you what's called an affirmative defense. If you have a policy, you have a written policy and you train your employees on that policy, and you can show that you're doing all of that on a regular basis, and then something happens and you can say, well, we've been doing this, we've been doing this in good faith and we've been complying with it. You know, you can put yourself in a much better. Um, situation, but then also with your customers, if you, you adopt kinds of policies, you also then put that on your website along with your privacy policy. Then it, it makes feel better about you as. Uh, a service provider

Kevin Metzger:

makes sense. And really, I mean, basically the responsibility for this isn't just, it's the technical, it's organizational, it's making sure you're getting back to everybody so that they understand how you're intentionally using AI at this point. Thank you. Thanks for helping us tackle in this, this talk. It's a tough one. It's not, it's, we're not with all the details yet. We don't know where it's going. I mean, but. Thank for sharing your knowledge with us on this. Our next show we explore how to without stifling innovation.

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Kevin Metzger

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Roman Trebon

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Gayle Gorvett

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