The integration of artificial intelligence (AI) in legal decision-making promises enhanced efficiency, accuracy, and consistency. However, the inherent complexity of legal reasoning, coupled with the need for fairness and ethical considerations, poses significant challenges. This study examines the role of psychology in managing these complexities, focusing on cognitive biases and human-AI interactions. We develop a Cognitive Bias Analysis Framework (CBAF) to identify and mitigate biases in AI systems and conduct Human-AI Interaction Studies (HAIS) to understand the perceptions and trust of legal professionals towards AI. Our findings highlight the importance of psychological insights in designing AI systems that are transparent, fair, and aligned with human ethical values, ultimately contributing to a more equitable legal system. © 2024 IEEE.