Dear Clients and Friends,

Artificial intelligence is no longer a futuristic concept—it is a daily tool. Surveys show that a substantial percentage of adults have used AI chat platforms, and a growing number report using them to research contracts, employment disputes, business separations, regulatory questions, and estate planning issues before ever contacting a lawyer.

Adoption has been extraordinarily fast. In just a few years, AI tools have become a primary way many individuals and businesses gather information—including information about their legal rights and risks.

A recent federal decision now highlights an important legal consequence of that trend.

The Heppner Decision at a Glance

In United States v. Heppner, (Order issued Feb. 17, 2026), the United States District Court for the Southern District of New York addressed whether materials generated through a public AI platform were protected by the attorney–client privilege or work-product doctrine.

The court held that they were not.

The defendant had used a public generative AI tool to analyze issues related to his legal situation. When those materials later became the subject of discovery, the court concluded that:

  • Communications with a public AI system are not communications with an attorney.
  • The AI provider is a third party.
  • Information shared with that third party was not confidential in the legal sense required to preserve privilege.
  • Sharing AI-generated materials with counsel later does not retroactively create privilege.

As a result, the materials were discoverable.

Why This Matters

Attorney–client privilege protects confidential communications between a client and a licensed attorney made for the purpose of seeking legal advice. A key element is confidentiality. When communications are voluntarily shared with third parties, privilege is often waived.

Many AI platforms operate under terms of service that allow retention, review, or processing of user inputs. Courts may view that structure as inconsistent with the level of confidentiality required to maintain privilege.

The consequences can be significant:

  • Litigation strategy may become discoverable.
  • Early assessments of liability or damages may be exposed.
  • Internal business facts entered into an AI system could lose protection.
  • Statements made to an AI tool may later be compared to sworn testimony.

Even apart from ultimate waiver, the issue can generate costly discovery disputes.

Does Using AI Always Waive Privilege?

Not automatically—but the risk is real.

Privilege analysis depends on the specific facts, including:

  • The platform used and its privacy structure.
  • Whether the AI system is public or privately controlled.
  • Whether counsel directed or supervised the use of the tool.
  • Whether the communication was reasonably intended to remain confidential.

The Heppner decision signals that courts may apply traditional privilege principles strictly in the AI context.

Best Practices for Clients

Given the rapid adoption of AI tools, we recommend the following:

  • Do not input confidential facts about pending or anticipated disputes into public AI platforms.
  • Avoid describing litigation strategy, internal investigations, or settlement posture in AI prompts.
  • Consult counsel before using AI to analyze contracts, regulatory exposure, employment matters, or potential claims.
  • If your organization uses AI internally, work with counsel to develop policies addressing confidentiality, data retention, and privilege.

AI can be a powerful research tool. It is not, however, a substitute for legal advice—and it does not automatically carry the protections of the attorney–client relationship.

Our Approach

At Rainey Law, LLP, we monitor developing case law involving AI, privilege, data governance, and professional responsibility. We advise clients on how to use emerging technologies while minimizing litigation risk and protecting sensitive information.

If you have questions about AI use within your business or personal affairs, or if you would like assistance developing internal AI policies, please contact our office. We are happy to discuss practical, tailored solutions.

Sincerely,
Robert Lee Rainey
Rainey Law, LLP