How AI Use Can Lead to an Unintentional Waiver of Privilege

When a lawyer faces a tight deadline, they might upload a draft agreement to a public AI chatbot, such as ChatGPT, and request an instant analysis. While the response may be quick, the lawyer may have unintentionally waived the attorney-client privilege.

This scenario is increasingly common as Generative AI (GenAI) use integrates into legal workflows, from drafting contracts to reviewing client communications. Understanding the AI tool’s data-handling protocols is a core ethical and professional responsibility for lawyers.

This guide explains how these unintentional privilege waivers occur and, crucially, how to prevent them. We outline the legal risks and offer practical solutions, including the use of secure AI tools such as Spellbook, to ensure the protection of confidentiality and privilege integrity.

Key Takeaways

• Using public AI tools that store and train on user inputs (prompts, responses, uploaded documents, etc.) is a risky practice that may waive privilege if client data is shared with third parties.
• Law firms must adopt secure, compliant AI platforms that provide enterprise-grade security and contractual protections, including guarantees that user inputs will not be used to train underlying AI models.
• Attorneys must comply with professional conduct rules on client confidentiality when adopting AI tools and maintain human oversight to prevent privilege breaches.

Legal Principles and Risk Factors Behind AI-Related Privilege Waiver

Privilege is a foundational legal protection, but it can be easily lost through disclosure to an unnecessary third party. The introduction of AI tools creates significant new liabilities for legal professionals.

Public vs. Private AI

Public AI models, such as ChatGPT in free mode, operate on open-access servers. These platforms often analyze user prompts and inputs to improve AI model performance. When you enter case facts or client details, your data can be retained and surface in responses to other users.

Private, law-specific AI tools, such as Spellbook, ensure data isolation. They don’t train on your inputs or share your information. They operate within secure, controlled environments designed for legal professionals handling privileged materials.

The Third-Party Doctrine Explained

Lawyers have an ethical and legal duty to understand the data-handling policies of any AI tool they use. Many AI platforms operate as third parties. When you enter client information into a public AI tool, you’re transmitting privileged information to the provider’s servers. Unless the provider is subject to a confidentiality agreement, courts may treat this as a voluntary disclosure.

Intentional vs. Inadvertent Waiver

An intentional waiver occurs when a lawyer knowingly discloses privileged data. An inadvertent waiver occurs when a party uploads client files to a public AI tool without realizing the platform retains that data. Courts may treat both seriously. If you use an AI tool without reviewing its data handling policies, and that use leads to an unintentional disclosure, courts could find you negligent.

The “Reasonable Steps” Test

When a lawyer claims an inadvertent waiver, courts assess whether the attorney took reasonable steps to preserve the privilege. This considers:

• Data security measures (encryption, access controls)
• Policies governing AI use
• Confidentiality agreements with AI vendors
• Speed of remedying any breach

Lawyers must audit AI tools to understand where data is stored, how it’s protected, and whether it’s used for model training. Maintain audit trails to track use of privileged information. Document these steps to prove diligence if the privilege is challenged.

Vendor Contracts as a Shield

A detailed vendor confidentiality agreement is the most vigorous defense. If structured correctly, these contracts legally bind AI providers to strict confidentiality obligations, including:

• Data retention limits
• Encryption standards
• Non-training guarantees
• Jurisdictional data storage requirements
• Audit rights
• Breach notification obligations

Spellbook's AI vendor contracts include non-training clauses and enterprise-grade confidentiality protections, making the platform an extension of your firm rather than a third party.

Scenarios Where Privilege May Be Waived Through AI Tools

Here are real-world examples of how everyday AI use can result in an inadvertent privilege waiver:

Using Public AI Chatbots for Legal Drafting or Research

An attorney enters specific case facts or client details into a public AI chatbot and asks for a drafting suggestion.

• Risk: The chatbot’s provider may log privileged content if it is not anonymized before it’s used in training. This is a direct disclosure that waives privilege.
• Solution: Use secure, legally compliant AI platforms designed for confidentiality.

Inputting Sensitive Case Information Into Non-Secure Systems

A paralegal uploads a folder of discovery documents, including internal attorney-client communications, to an unverified AI application for summarization.

• Risk: The lack of encryption or unknown data residency can expose sensitive communications to unauthorized parties, leading to a breach.
• Solution: Always confirm security certifications (SOC 2, ISO 27001) and employ tools that offer confidentiality guarantees, data isolation, and are backed by a strong vendor confidentiality agreement that includes a non-training clause.

Allowing Non-Legal Staff to Use AI With Privileged Materials

An assistant uses an AI tool to simplify language in a complex, privileged internal memo.

• Risk: Staff using AI tools without adhering to formal policies and training may unintentionally disclose confidential data. Lawyers retain ultimate responsibility for safeguarding privileged information.
• Solution: Implement clear access controls and mandatory staff training on the ethical and privacy-preserving use of AI.

Relying on AI-Generated Content Without Review or Redaction

A lawyer sends an AI-drafted contract clause to a third party without reviewing it, inadvertently disclosing a confidential client detail.

• Risk: AI outputs may create privilege issues if they reveal confidential insights. Filing or sharing a document with the information can constitute an inadvertent disclosure.
• Solution: Human oversight is critical. All AI-generated content should be reviewed before using it in legal work. 

Legal and Ethical Implications of AI-Related Privilege Waivers

Privilege waiver due to AI use triggers serious legal and ethical implications that affect your client relationships and firm reputation.

• Bar Association Guidance on AI and Confidentiality: The ABA’s Model Rules, for example, require lawyers to protect confidential information (Rule 1.6) and maintain competence, including understanding technology benefits and risks (Rule 1.1).
• Professional Responsibility and Technology Competence Rules: Lawyers must understand how their AI tools operate, including whether the tool retains user inputs, where data is stored, and whether the platform is trained on client information.
• Duty to Supervise Technology and Maintain Client Trust: Partners have a duty to supervise firm compliance with professional rules (Model Rule 5.1). This includes establishing written AI governance policies, training staff, auditing AI tool usage, and responding quickly to potential breaches. 
• Regulatory Considerations Under Data Privacy and Cybersecurity Laws: Depending on their client base, lawyers may need to comply with GDPR, CCPA, state cybersecurity laws, and industry-specific regulations.

How Law Firms Can Preserve and Avoid Privilege Waivers When Using AI

Attorneys can protect the attorney-client privilege when using AI if law firms implement a compliant roadmap of safeguards and governance practices, including:

• Implement AI Review Protocols and Maintain Human Oversight: Every AI-generated document requires human lawyer oversight to prevent privilege breaches. Create formal review protocols with checklists covering common risks.
• Limit AI Access to Privileged or Confidential Files: Implement policies that prohibit feeding sensitive, confidential, or highly protected files or information into systems without a firm vendor contract and a zero-data-retention guarantee.
• Use Contractual and Vendor Safeguards: Choose AI vendors that offer comprehensive contracts with explicit guarantees, including data isolation, non-training commitments, and confidentiality protections. Spellbook’s vendor agreements include all these safeguards.
• Conduct Due Diligence on AI Vendors and Data Storage Standards: Before adopting any AI tool, check security certifications (SOC 2, ISO 27001), data handling practices, and regulatory compliance. Investigate past data breaches and assess the vendor's financial stability.
• Adopt Privately Hosted or Privilege-Protected AI Platforms: Opt for private platforms explicitly designed for legal work. Spellbook is a good example.
• Establish Written AI Governance Frameworks and Ongoing Staff Training: Create a formal AI use policy that defines acceptable AI tool inputs, required security measures, and actions for breaches.

How Spellbook Helps Prevent AI-Related Privilege Waivers

Law firms can confidently embrace AI without risking client privilege. Spellbook is engineered specifically for legal professionals, combining innovation with uncompromising security and compliance.

• Zero-Retention Security: Spellbook uses private hosting, enterprise-grade encryption, and a strict zero-data-retention policy. Client data is isolated, managed under strict contracts, and kept separate from the data used for training AI models.
• Contractual Protection: Spellbook’s vendor agreements include non-training guarantees, strong confidentiality clauses, and SOC 2-compliant infrastructure. This legally insulates client data, ensuring that the platform’s use does not constitute a third-party disclosure.
• Privilege-Protected Environment: Spellbook’s secure infrastructure allows you to automate complex contract review and drafting with complete confidence that your attorney-client communications remain protected. By choosing a platform with ZDR, encryption, and SOC 2-compliance, you are taking the "reasonable steps" required by ethics rules to protect the privilege. 

Ready to leverage the power of GenAI without the risk of waiver? Spellbook provides the technology and the protections you need. Book a demo today!

Frequently Asked Questions

How Does Using Artificial Intelligence Affect Attorney-Client Privilege?

Using AI can waive privilege if you share client data with third-party providers who aren’t bound by confidentiality agreements. To protect privilege: vet vendors, get confidentiality contracts with AI providers, use privilege-protected platforms, and review all AI outputs.

How Do Lawyers Ensure an AI Tool Does Not Retain or Share Sensitive Client Information?

Steps include: 1) Check the vendor’s privacy policy. 2) Get written guarantees against data retention. 3) Verify security certifications (SOC 2, ISO 27001). 4) Confirm encryption (AES-256).

Are AI-Generated Documents Considered Privileged?

Yes, if created within a confidential attorney-client relationship and adequately protected. The AI platform must be secure; human oversight is required; and you must maintain appropriate safeguards.

What Should Lawyers Look for in AI Vendors to Protect Confidentiality?

Lawyers should look for secure hosting, non-training policies, audit trails, confidentiality contracts, security certifications (SOC 2, ISO 27001), encryption (AES-256), clear data deletion policies, breach notification, privacy compliance (GDPR, CCPA), and access controls.

Are AI Chatbots Safe to Use for Legal Discussions with Clients?

Public chatbots, such as free ChatGPT, lack confidentiality protections and may disclose privileged data during model training. Use secure, legal-specific tools like Spellbook instead to protect privilege.

How Do Courts View Privilege Waivers Involving AI Tools?

Courts apply the same privilege principles to AI-related disclosures as traditional technology risks. They focus on whether the lawyer took “reasonable precautions” to protect confidentiality. This includes vetting technologies, implementing security controls, obtaining contracts, and responding quickly to breaches.