SDNY Ruling Compromises Attorney-Client Privilege with AI Use

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🚨 Client Alert: Consumer AI and Attorney-Client Privilege Risk A recent SDNY ruling should give executives and fund managers pause.   In United States v. Heppner, a defendant used a consumer AI platform to prepare defense-strategy materials and later shared those materials with counsel. The court found that because the information had been submitted to a third-party AI provider under non-confidential terms, attorney-client privilege protection was compromised.   The takeaway is simple but serious: Entering legal strategy, regulatory analysis, investigation details, or counsel’s advice into consumer AI tools may constitute disclosure to a third party — potentially undermining privilege.   If your organization is using AI tools in legal, compliance, or regulatory contexts, now is the time to review policies, vendor terms, and internal practices. We are actively advising clients on AI-use frameworks and privilege-preservation strategies and assisting organizations in implementing immediate, practical safeguards to reduce risk. #AI #LegalPrivilege #Compliance #RiskManagement #InvestmentAdvisers #PrivateFunds #Governance

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