The legal side of AI with Sharon Toerek

AI has made marketing faster. From writing and research to brainstorming and campaign planning, the tools keep getting better.

But as Sharon Toerek, Owner and Founder of Legal+Creative | Toerek Law, explains on this week's Little Talks, moving faster also means being more thoughtful about how you use AI.

Sharon joined Sam and Roop to discuss the legal side of AI, including intellectual property, data privacy, and why those conversations can't wait until something goes wrong.

The takeaway wasn't that marketers should avoid AI. It was that every team should understand the tools they're using, establish clear policies, and make sure legal considerations keep pace with the technology.

AI is changing the way marketers work. The companies that benefit most will be the ones that pair innovation with the right guardrails.

See you next week for more Little Talks.

— Claudia, Roop, Shannon, and Sam

Transcript

SPEAKER_00 0:00

Welcome to Little Talks, your weekly dose of marketing news, trends, and insights from Littlefield Agency. Grab your coffee, turn up the volume, and let's get into it.

SPEAKER_04 0:15

All right. All right, all right, all right. Welcome back to another edition of Littlefield of Little Talks with Littlefield Agency. Golly, I've got a guest on the line. I'm screwing this up. We'll fix it in post. Oh my gosh, we'll fix it in post. Little Talks with Littlefield Agency with a very, very special virtual guest, Sharon Toric. Sharon, welcome.

SPEAKER_03 0:32

Thanks for having me, gentlemen.

SPEAKER_04 0:34

Oh my gosh. It is so good to see you, and it's so good to have you on our pod. Um I'm gonna I'm gonna give you your uh your formal introduction here in a little bit, but I want to give our listeners some background. Sharon and I go back almost a decade now, I think uh about nine and a half years. Um as as many of you of the listeners know, I'm uh chairman of Magnet Global and uh independently owned advertising agencies across the United States, Amea, APAC, and uh South America. And uh Sharon, I forget which meeting it was, but we met and we corresponded, and you were you were uh very involved with Magnet at the time. And our our paths crossed there, and then boom, in the small world that we live in, you and I bump quite literally bump into each other in New York City and the World Trade Center.

SPEAKER_02 1:13

Technically it was yeah, a literal physical bump in at a staircase.

SPEAKER_04 1:17

I know I almost knocked your coffee over. I was like, oh my gosh. I was like, I haven't seen you since probably before the pandemic, and we were at Mir and Live together. Thank you to Brent Hodgins for hosting that.

SPEAKER_03 1:26

Yeah.

SPEAKER_04 1:26

I'm really short, so I'm easy to uh And no we're opposites, right? I'm I'm I'm I'm nice and tall. We we saw each other, we bumped into each other. And here's the funny thing, we were like, gosh, we need to catch up. And then life got busy, and then I have a random email from someone, and I believe her name is Chloe. Um and she says, Hi, you have little talks with Littlefield Agency, and I have the perfect guest for you, and her name is Sharon Torek. So, Sharon, be honest, did you did you bump them or did it was this just a small crazy world?

SPEAKER_03 1:59

Total serendipity that I had uh run into you right before Chloe, who give us a little bit of help and you know, scouting the right opportunities. And but no, uh there she had no reason to connect dots, and neither did I until she reached out in your show. So it was meant to be.

SPEAKER_04 2:19

I saw your name in my subject line. It is meant to be. It's a it's Chloe said, Hey Chloe, guess what? She's on the podcast because I already know Sharon. We go way back. And um, and Roop, this is obviously we had a pre-call before this, but you get to hang out with uh Sharon, myself, and Claude today.

SPEAKER_01 2:32

And I'm Roop, the co-host of this podcast. Usually introduced us, he didn't introduce me today. I see exactly where it's about to go. Hi, Sharon.

SPEAKER_03 2:43

I'm not sure whether that means I feel special.

SPEAKER_04 2:46

Oh yeah, you're special. I want to give this is a this is a great bio. Um she and here's what I love about Sharon. She gave us a short and she gave us a long, and I'm actually gonna read the long. I like it. Um Sharon Torque is a marketer and intellectual property attorney. Not often is this her first lawyer, 100% her first lawyer on the pod. An IP attorney who helps independent marketing, digital, PR, and creative agencies protect their assets and turn ideas into revenue. She's the founder of Toric Law, a law firm dedicated to marketing agencies, where she focuses on IP, small contracts, and marketing uh regulation compliance. Sharon also hosts the Innovative Agency Podcast and serves as a trusted legal partner to agencies and communities across the U.S. Sharon shows agency owners how to turn legal from a cost line into a strategic profit engine. She helps teams lock down IP rights, manage AI and data privacy risks, and negotiate uh agency-friendly contracts that protect margin and client relationships. In a fast, a very, very fast-changing market. She gives leaders clear, practical steps to stay creative, stay compliant, and grow. And as you can imagine, so we told Sharon this, right? We have agencies that listen to this, we have a lot of brand marketers, client side. This is gonna be very applicable to you because today we are talking about AI and IP and all things data privacy. So this is gonna be really cool, and this is great for our listeners because you guys get to hear our voice all the time, especially yours, Mr. Man.

SPEAKER_01 4:09

Once in a while.

SPEAKER_04 4:10

Once in a while. Um today is Sharon's floor. So what we're gonna do, Claudia, topic por favor, if you could ring that bell. Um Sharon's gonna walk us through we're gonna call it two risks and five tips. Um, two legal risks with IP and data privacy, and then five tips for brand marketers and how you can overcome this in the years to come, especially given how fast it changes. So, Sharon, over to you.

SPEAKER_03 4:32

Amazing. Well, thank you for the floor. I appreciate it. You know, we've been working pretty diligently over the last two and a half years to identify what are the top risks that marketers, and whether you are a brand side marketer or you are in an agency helping brands navigate AI, we've seen patterns, you know. That's one of the blessings of working in sort of a narrowly defined vertical. And so we see patterns in terms of risks that marketers face in incorporating AI into not only their operations, but particularly when using generative AI. Um, and we've sort of developed some quick action strategies that probably everybody listening here can take away at least one of these and start working on them for incremental improvement in your risk management. Because my strong belief is that you gotta balance the opportunities that we're all facing with AI, and I do believe strongly in those, along with some smart risk management, right? So that we're we're protecting ourselves along the way. Um so I would say that the top two areas of legal risk that marketers encounter right now um in adopting AI is first of all, intellectual property considerations, and second of all, data privacy considerations. Oh my goodness, yeah. You know, there's there's obviously there's there are sub-issues under each of those branches of the tree. Um, but that's really what it comes down to in terms of marketers and their adoption of these these tactics and these technologies. Um I've been an IP lawyer for a really long time before I even worked with marketers. Um, and what I see out there now is a lot of sort of fear and trepidation around Yeah.

SPEAKER_04 6:24

I would agree with that.

SPEAKER_03 6:26

When AI is used to create it, and who's gonna be responsible if anything goes sideways in terms of infringing on another third party?

SPEAKER_04 6:36

And Sharon, let's go back a couple years of the whole Hollywood writer strike, right? I mean, it was people were up in arms, et cetera. And I feel like that was kind of a big, I don't want to call it the catalyst, but it was uh very uh newsworthy. And IP has always been, you know, valuable and and precious, but I feel like today I can't even imagine your world. I mean, seriously.

SPEAKER_03 6:54

Right. It's uh it was a primary negotiating point in the SAG After Strikes. Both the writers and the performers were very concerned about, you know, how AI was going to be used to basically cut into their potential revenue and their ability to control their likenesses and their work um over time. And then you've got the major owners of huge creative portfolios, you know, the Disneys of the World, Associated Press, the New York Times, um involved in major litigation with the major AI platforms. OpenAI um was probably the first and most often sued, um, but anthropic as well, in terms of ingesting in big, you know, large groups, uh, works that were owned by others without the permission of those people. And then it, you know, it coming out in output when we would sort of use those engines to create as marketers. And so the question becomes if you're a brand marketer, is how do I know that you, agency, are gonna turn work over to us when you've used AI to create it and it's gonna be ownable by you, by us, by anybody?

SPEAKER_01 8:10

Um dumb question coming in.

SPEAKER_04 8:12

No, I was just saying, and for our listeners, we we told Sharon that she was gonna just continuously blow our minds on this podcast. So please, dumb couldn't there are no dumb questions.

SPEAKER_01 8:21

I can remember how to construct it. So um this feels different. AI generating content is is different than AI referencing content. Is that fair? Because it seems like Google has always kind of skirted this a little bit in showing images and videos of things that maybe they don't have access to. So a user can use the Google as a reference, but AI taking it to the next step of generating content off that reference is really what this is about, right?

SPEAKER_03 8:46

Right. That's right. We're not really creating any new legal theories here under the copyright law. It's just that AI has created so much more real estate for infringement to occur. And what we're facing is using it in the generative process of creativity, um, even conceptually and not in final assets. And the and the perceived cost savings in doing that, you know, amongst brands and the agencies that serve them means that you've got a lot of incentive um to I think this is changing a little bit, by the way. I will I'll I'll sort of give a caveat to what I'm gonna say. But potentially a lot of incentive to use these tools generatively to create work that um leverages really highly, right? It's fast, it's it can be inexpensive. Um of course a copyright infringement claim is not inexpensive, but it can be inexpensive, it can be fast, and the quality of some of the work is it's it's hard to argue with the utility of using some of these tools, but I think the difference, Ruth, between, you know, what you used to be able to find or lift off of Google Images, for example, and what we're seeing now coming out of the major LLMs in terms of, you know, creative writing or any of the platforms that create imagery, is that it's hard to know what's real and it's hard to know what's fake. And more to the point, it's hard to know if the output you're getting from these tools is identical to some other owned work out there. You just you just cannot, there's no way for the user to really discern. And so you're taking risk without really the ability to do the due diligence to know what kind of risk you're taking on.

SPEAKER_04 10:40

And that's on the IP side, and then we talk about data privacy, right?

SPEAKER_03 10:43

Oh my goodness, like that's data privacy is I think that I think is underindexed in terms of concern levels. Yeah, I agree. But you know, the the one side of it is as as a brand, you collect data from lots of different places. This was always true. But you know, maybe somebody bought a list years ago, maybe somebody went to a conference and got the attendee list, et cetera, et cetera. You're you know, you're gloming all this information together, turning it over to maybe an agency, maybe a vendor partner. Um the like I said, the real estate for breaching a data privacy rule has gotten more and more vast because the ability of these platforms to manipulate this data and use it is just exponential. And so I think AI enabled and unintentional data privacy violations are are gonna be a frontier of risk for marketers generally. And so if you're running campaigns, you know, using data that or or agentically using this data, especially, that's that concerns me quite a bit.

SPEAKER_04 11:57

I didn't think about the agentically side, but the yeah, at one 100%. Well, and and we're not even we as little field agency, we're not in a highly regulated, you know, we don't have healthcare clients. And I mean, we I I can't even imagine in the super highly regulated space what that looks like uh as we get into data privacy.

SPEAKER_03 12:15

So again, I know, and I've just I I've just been um absorbing some content recently, some legal content, around the inferences that can be made by AI when they put data points together from unrelated sources about somebody's like personal health information, personal financial information. It's really frightening. I mean, from a marketer's perspective, what can be done with that information intentionally, unintentionally. And it's you know, it's not the job of the marketer to be the lawyer in the room, but it is the job of the marketer in the room to risk spot, right? And that's a good that's that's be the person in the room brave enough to say, you know what, we need to slow this down. And marketers don't like to slow things down, as you all know. Um they like to move fast, they like to be viral, they like to go, go, go strike why irons hot. And so kind of looking that around that corner and and being the part person in the room who says, you know, wait a minute, let's think about this more.

SPEAKER_04 13:19

Yeah, this is probably a great podcast for you to listen to. You're describing Rube, by the way, who I'm completely deals with a lot of our. But to but Sharon's point, and you hit the nail on the head, I think it is. It's the unintentionality, right? None of us are trying to get sued or have our clients get sued, but I the yes, we we got to move fast. Oh God, we didn't think that's the risk spot is is very spot on. So as we think about not only agencies, but our but our clients, right? Our clients and our prospective clients that are listening to this on the brand side. Sharon, as is we're on the it's not the forefront, but as we're navigating this ever-changing landscape, and who knows what we're talking about in you know 12 to 24 months. What are what are your tips as we I like the risk spot idea, but there's we gotta move fast, we gotta act, we gotta convert leads, we gotta make more money. Um so for those brand marketers, as they're looking to increase revenue, what what what can we be doing? And then how can we help as agency partners as they navigate this?

SPEAKER_03 14:16

I think the first thing to remember is this is a team sport. And so if you're a brand marketer, uh, I'm gonna say the first tactical takeaway I'd love for you all to have, whether you are in-house at a brand or whether you are on the agency side of things, first step, it's crucial conversations. If you are an in-house marketer, that means you need to be having those conversations with your IT people, with your internal legal people, sometimes even your procurement people as marketers, so that you're taking, so everybody's on the same page about what your company's policy is around using some of these platforms, um, what kind of due diligence is done, what are the human guardrails around all of this? Likewise, you know, going across the bridge, if you will, you need to be talking to your agencies, your vendors, and agencies listening. You need to be talking to all the right constituents on the brand side to understand what are your policies around AI usage, um, what use cases are okay, what use cases are not, what platforms are okay, et cetera. So crucial conversations that is the first risk management tool I want you all to keep in mind because that is what helps you all surface the risk and plan a little bit more carefully for it.

SPEAKER_04 15:28

Well said, okay.

SPEAKER_03 15:30

All right. Um, step two policies. And I know many of you listening would rather watch paint dry than think about writing a policy.

SPEAKER_04 15:39

You love you love our policies, don't you? I've watched the paint dry. You've been here for 15 years. You ever read an employee policy here?

SPEAKER_01 15:45

I haven't I have a whole employee handbook I've never opened.

SPEAKER_04 15:47

There you go, 15 years later. But thank you, Sharon. Please, let's enlighten them.

SPEAKER_03 15:51

We're gonna change that. We're gonna change that dynamic. And the goal here is not length or complexity, and that can always become the end goal. But I want you to start, you know, today, tomorrow, Monday, whenever. Think about what your organization's policies need to be around AI usage, you know, checklist it first, the platforms, the use cases, the permissions, the human guardrails, and don't just write the policies, but socialize the policies with the people who need to know what they are. Have an internal policy, have an external facing policy so that the rest of the world with which you deal on a regular basis, vendors, partners, suppliers understands where you're coming from, and vice versa. So that's step through, and that is something anybody can get a good start on with or without legal intervention at any time. Just think it through from a business perspective. When it's time to get legal to weigh in, then have them weigh in once you've got a good foundation going, right?

SPEAKER_04 16:50

Well, and I and I think about our AI policy. I think our AI policy is changing every 45 to 60 days, truly. Julie just said not an aiming.

SPEAKER_03 16:57

It's perfectly normal and healthy, and it's gonna be a dynamic living, breathing document because AI is moving faster than any other technological force we've had, you know, foisted upon us as marketers, honestly.

SPEAKER_04 17:10

And now that you say this, I I don't know. I need to look into it. I've got just wrote myself what to do. So thank you, Sharon. Is is the external policy? Like what how do we communicate this?

SPEAKER_03 17:19

Um facing policy is a really smart plan. Okay, client management and risk management tool.

SPEAKER_04 17:26

Okay, thank you. All right, number three, Sharon. This is great.

SPEAKER_03 17:29

Step three, contract language. Um, if you're a brand, um, and you want to be thinking about how you are expressing your rules, your expectations and obligations around AI usage in your actual service agreements with your vendors, your partners, and the like. Similarly, if you're a vendor, you're an agency, um, you want to have relevant language in your agreements with your clients, with your per third-party vendors, your data brokers, all of those folks around AI usage so that everybody understands. And these have to waterfall with each other, right? Your the brand to agency contract should waterfall with the agency to vendor contract in terms of who's who is responsible for what and where the liability might lie if anything goes sideways. So good contracting language. Great point. Um, fourth, that's another watching paint dry tip for you all. But I want you to take a look at the terms and conditions of at least the top three LLMs that you are regularly using on a day-to-day basis. I want you to make sure that you understand what they say about IP ownership.

SPEAKER_00 18:44

Yep.

SPEAKER_03 18:44

That you understand what they say about um liability, indemnification, all that fun legal stuff. And I want you to understand what level of subscription you have to the various platforms you're using. Um in today's modern marketing world, whether you're a brand marketer, whether you're an agency marketer, you're using freelancers sometimes or all the time. You need to make sure that they understand the terms and conditions of all the platforms that are being used, and that everybody's using the same enterprise level account or professional level account. Um, and you've got the right level of security for you and your uses. So evaluate your terms and conditions.

SPEAKER_04 19:27

So, Sharon, you're telling us is before you go to bed, or maybe it's just part of your work, you're you're reading, you're reading T's and C's of LIS.

SPEAKER_03 19:37

Look, I mean, let's take it slow, right? I mean, maybe maybe maybe we have a lunch and learn.

SPEAKER_04 19:45

Hey, look at that.

SPEAKER_03 19:47

And we put the terms and conditions up on a screen and we look at each other. I don't know. Whatever works for you, or you know, maybe you divide and conquer. Like I said, this is a team sport. This is not just the job of any one person, but and I didn't say read them all, Sam. I said, um good for you, buddy.

SPEAKER_04 20:06

Is there an audiobook version? Yeah, is there an audiobook version?

SPEAKER_03 20:11

Right, audiobook. I love it. If you don't understand something, that's what you know.

SPEAKER_04 20:15

No, I think that's fair. That's fair. Um, okay, no, that's that's I I'm aligned. Number five, Sharon. Lay us lay us on us with the last one here.

SPEAKER_03 20:23

Sort of relates to the last with team training. It does you no good to write policies, it does you no good to update your contract language or read the T's and C's of the platforms you use if you are not regularly socializing this information within your marketing department, um, across departments, if you are in a mid-market or enterprise-sized company with your agencies or internally in an agency, regular team learning, training, conversations around all this to make sure that you are as up to date and as able to spot issues as possible.

SPEAKER_04 20:59

So here's here's the thing, and we were gonna throw you a bonus question, which we are. Um but these five these five tips. I mean, this is this is great. Like literally, as we're as we're jotting down notes here. Do you have anything to add on to that?

SPEAKER_01 21:09

No, I'm just trying to stay out of jail today.

SPEAKER_04 21:13

That's that's a good that's a good tip. Uh there's there's tip number six, stay out of jail. Okay, bonus questions, uh Sharon. Yeah, we'll talk after the excited. We won't share that publicly, but thank you for thinking in advance. Um Sharon, five years from now, biggest AI legal mistake that a company will look back and be like, man, we should have addressed this sooner. And you just gave us five great tips. But like, if there is one big thing that a brand marketer and they're like, ah, damn, should have done that. What is it?

SPEAKER_03 21:42

I think it's gonna be around um misuse of data. I really do. I I think we're gonna figure out the IP stuff a lot sooner than we're gonna figure out the data stuff. And the reason for that is that there is no uniform standard in the United States around data privacy. And I'm not optimistic there'll be a uniform national standard around AI and liability and things like that for misusing data. So I think it will have been a breach of somebody's data privacy rights caused by the use of one of these platforms.

SPEAKER_04 22:17

I think you are I think you are spot on. And uh the analogy that it comes to mind, Sharon, is think about, and cryptocurrency is still a thing, but like think about the literal United States federal government trying to figure out crypto years ago and they're and the regulatory components of that. And I do think about this, like they they are trying to figure this out. And I know that um uh Altman and all those guys are they're in court and they're at they're having all the the high-level conversations, but it's it is crazy to me given how fast this is moving, how it is regulated and how they do keep up with this, because so far it's I just feel like it's crazy.

SPEAKER_03 22:53

Well, we're seeing parallels, you know, not to get too deep into it policy-wise, but there's parallels between the way we've handled data privacy lawmaking and the way it seems like we're looking at AI lawmaking in the US right now. We've got this state-to-state patchwork of data privacy rules, no federal standard, and really no positive movement that's meaningful towards a federal standard. You have that with AI too, but you have the additional layering on top of it of the federal government right now, anyway, as we're having this conversation, doesn't really want states to get involved in regulating AI. Um, they didn't they took a hands-off approach regarding data privacy, but they really are are would prefer the states do next to nothing in terms of regulating it. So we'll see what happens.

SPEAKER_04 23:42

God, it is good. Well, we got saddle up, everyone, then you know, fasten your seatbelt, because we're we're along for the ride. Sharon, this is great. This is very, very insightful. Like I said, you're that you're our first you know legal representative to ever be on the podcast. So that this is uh this is wonderful and very insightful. And um, and and tour listeners, right? If if you're agency side, awesome, you you probably know Sharon's name. She's very well uh respected and known in our industry. Um if you are a brand side marker, have not heard of her, uh check out her podcast, Innovative Agency Podcast. Um lots of lots of insights uh to continue to be gathered there. But Sharon, we know you're a busy person. You're you're fresh out of uh Los Angeles uh for small uh agency of the year. So we are just so thankful um that you joined us here virtually today.

SPEAKER_03 24:28

It was a delight talking with you guys. Thank you so much for having me on the show. I really appreciate it.

SPEAKER_04 24:32

Absolutely. This will go live uh here soon. We'll keep you posted, we'll tag you, and uh we we look forward to staying in touch when I bump into you at the next conference and hopefully not spoil your coffee this time.

SPEAKER_03 24:43

Amazing.

SPEAKER_04 24:44

Okay, Sharon, thank you so much. Great to see you as always.

SPEAKER_00 24:47

Bye guys.

SPEAKER_04 24:48

Bye, bye bye.

SPEAKER_00 24:48

Adios. And that's a wrap. We hope you found a spark of inspiration for your marketing strategy. Don't forget to subscribe and follow us at Littlefield Agency to keep the conversation going. Catch you next time.