Artificial intelligence tools are changing legal work, both within businesses and law firms. While these tools present a number of opportunities and potential efficiencies, they also pose significant challenges and risks. One such risk was illustrated by a recent decision from Judge Rakoff in a criminal case pending in the Southern District of New York, United States v. Heppner, which highlights the challenges in maintaining the confidentiality of attorney-client communications and work-product when AI tools are used.
Although Heppner arose in a criminal case, its reasoning applies with equal force to civil litigation, regulatory inquiries, internal investigations, and corporate transactions. AI-generated records created today—prompts, outputs, and AI-generated transcripts of meetings—could be sought by adversaries in future disputes, investigations, and regulatory proceedings.
Key Takeaways
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Non-attorney communications with AI tools are not communications with an attorney, and therefore are not privileged and are subject to discovery, even if the AI tool is providing purported “legal advice.”
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A client’s input of attorney work-product into an AI tool, or use of an AI tool to transcribe attorney-client conversations, may destroy confidentiality and make the materials subject to discovery.
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The level of confidentiality can vary significantly depending on the type of AI deployment: consumer-grade tools offer little if any confidentiality protection; third-party enterprise tools with negotiated privacy terms can offer more protection; and self-hosted or single-user deployments offer the strongest confidentiality protection.
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AI notetaking and transcription tools pose a distinct and significant risk to privilege and confidentiality, particularly when they record conversations with counsel or capture sensitive deal discussions.
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Clients using AI tools in connection with legal matters should carefully consider the data protections and confidentiality provided by the AI tool, input privileged material or attorney work-product only at the direction of counsel, ensure that appropriate steps are taken so that protections from disclosure are maintained, and be aware of the ways in which AI tools can produce discoverable material in future disputes.
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If you have questions concerning the matters discussed above, or would like more detailed information, please contact one of the attorneys below:
David R. Allen at (203) 325-5003 or dallen@fdh.com or Andrew M. Calamari at (203) 325-5057 or acalamari@fdh.com