Book a principal
Exec x AISay No to Shadow AI

Day 3Client legal work in a consumer AI tool

AI generated studio photograph of a barrister in a white court wig and black gown with white bands, seen from the chest up against a plain light grey background, head turned to look over his shoulder with a guarded expression. Caption reads: I used Maude's free AI app to draft legal advice for a client. Attributed to George, Lawyer.

I used Maude's free AI app to draft legal advice for a client

George, Lawyer

Why this one is dangerous

George has done two things at once. He has given a consumer app material that belongs to his client, and he has asked a system that owes no duty to anyone to do work that carries a professional duty to someone.

Privilege is built on confidentiality. The free tier of a consumer AI tool is not confidential. Its terms typically allow the provider to retain prompts, review them, train on them and disclose them. Reference 11

The work product is the second exposure. Generated citations that do not exist, quotations that were never written and law from the wrong jurisdiction all read fluently until someone checks. Reference 12

What the courts have already done

In February 2026 a federal court in New York held that documents a defendant had prepared with a consumer AI tool were not protected by privilege. The reasoning was simple. The free tier's terms let the provider keep and disclose what was entered, so there was no reasonable expectation of confidentiality, and entering the material was a disclosure to a third party. One trial court, one jurisdiction, and the law is unsettled. The direction is not. Reference 11

The hallucination record is no longer anecdote. A public database tracked 2,022 court decisions involving fabricated citations or invented authority by 5 September 2026, across the United States, Canada, Australia, the United Kingdom and beyond. Lawyers have been fined, ordered to pay costs, referred to regulators and, in one case, struck off. Reference 12

How to combat it

Written for the partners, CISOs and IT directors who own the firm's controls, not only for the lawyer in the picture.

  • Block the free tiers at network and device level, and tell the firm you have. Nobody accidentally uses a tool that does not open.
  • Give every fee earner a sanctioned tool from day one. The firms with the least shadow AI are the ones where the approved tool is the best tool available.
  • Write the rule at the level of data, not tools. Client identifying material never enters a system the firm does not hold a contract with.
  • Require verification of every generated citation against a primary source, and make the lawyer who signs the document accountable for it by name.
  • Run a no fault disclosure route. A lawyer who tells you what they used is your detection system working.

The safer route

The answer is not to keep lawyers away from AI. It is to buy the version with a contract attached.

The enterprise tiers of the frontier models are different products from the free apps wearing the same names. Anthropic states that inputs and outputs from its commercial products, including Claude for Work, are not used to train its models by default. OpenAI states the same for ChatGPT Enterprise and Business, alongside SOC 2 Type 2 audits, encryption in transit and at rest, and administrator controlled retention. Legal technology built on those models adds matter level access controls and audit trails inside the firm's own tenancy. References 1315

A tool under contract gives the firm what the free app cannot. Terms it can point to when privilege is questioned, and a log it can point to when a citation is.