Lai was stretchered off the ground during Fremantle's win over the Western Bulldogs after Liam Picken crashed into his lower legs.
It was initially believed Lai had injured his ACL, but AFL umpires boss Jeff Gieschen has revealed the diagnosis is much rosier.
"He's seeing the surgeon this morning," Gieschen told AFL.com.au.
"It's been diagnosed that he's got a damaged PCL (Posterior Cruciate Ligament) and damaged medial ligament, and requires an operation.
"We're looking at a maximum of six months, so it's probably ruled him out for the rest of the year."
Umpire clash a blur: Picken
Staff from both Fremantle and the Western Bulldogs rallied to help the injured umpire off the ground after the incident, and Gieschen says Lai is thankful.
"His spirits are good. He's very appreciative of the support he got from David Young, the Bulldogs surgeon," he said.
"He's very appreciative of the support he got from both clubs."
While it seemed unusual, it's not the first time a reserve goal umpire has been called on during a match.
"From time to time they (goal umpires) get injured or get sick and tear a calf or something," Gieschen said.
"We had one last year, an umpire got ill at half-time over in Perth so a goal umpire came off the bench to finish off the game."
In Lai's case, Gieschen says his injury highlights the damage that can occur when a player slides into a contest, validating the new contact below the knees rule.
"It just shows how vulnerable people are when they're standing up and they receive that contact around the knee and below the knee. It probably indicates how dangerous it can be," he said.
"All credit to the Laws of the Game Committee for seeing that as a serious health and safety issue, and for bringing the rule in. We're seeing the benefit of it with players staying on their feet and a safer working environment for the players."
Jacqui Reed is a reporter for AFL Media. Follow her on Twitter @JacquiReedAFL
