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A court ruling has prompted law firms across US to issue urgent advisories to clients about the legal risks of using AI when facing litigation.
More than a dozen major US law firms have issued client advisories and posted guidance on their websites.
US lawyers are warning clients that conversations with AI chatbots such as ChatGPT and Claude are not protected by attorney-client privilege and could be handed over to prosecutors or opposing parties in court- a concern sharpened by a recent federal ruling in New York.
The warnings follow a February decision by Manhattan-based US District Judge Jed Rakoff, who ordered the former chair of bankrupt financial services company GWG Holdings to turn over 31 documents he had generated using Anthropic’s Claude as part of his criminal defence preparation. The ruling has prompted law firms across the country to issue urgent advisories to clients about the legal risks of using AI when facing litigation.
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What Was The Case That Started It All?
Bradley Heppner, the former chair of GWG Holdings, was charged last November with securities and wire fraud and pleaded not guilty. While preparing his defence, he used Claude to draft reports about his case, which he then shared with his attorneys. His lawyers argued those documents should be protected under attorney-client privilege but prosecutors disagreed.
Judge Rakoff sided with prosecutors and said that no attorney-client relationship exists “or could exist, between an AI user and a platform such as Claude,” adding that Claude itself “expressly provided that users have no expectation of privacy in their inputs.”
Why Doesn’t Attorney-Client Privilege Cover AI Chats?
Attorney-client privilege is a bedrock legal protection in the United States that shields communications between a person and their lawyer from prosecutors and opposing parties. The problem is that AI chatbots are not lawyers. Under long-established legal principle, voluntarily sharing information from a lawyer with any third party- human or otherwise- can strip away that protection entirely.
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When someone types details of their legal situation into an AI platform, they are in effect disclosing it to a third party. Adding to the concern, both OpenAI and Anthropic state in their terms that they can share user data with third parties.
What Are Lawyers Now Telling Their Clients?
More than a dozen major US law firms have issued client advisories and posted guidance on their websites. Several common recommendations have emerged. Where possible, firms including O’Melveny & Myers suggest using closed, corporate AI systems rather than consumer-facing chatbots, though they acknowledge even that remains largely untested in court. If AI research is being conducted at a lawyer’s direction, clients are advised to state that explicitly in the prompt.
Washington D.C., United States of America (USA)
April 15, 2026, 7:02 PM IST
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