Why pay hundreds of dollars per hour and wait days or weeks for legal advice when AI is instantly available for a small monthly fee, or even for free?

Here is how I see it: Using artificial intelligence instead of an attorney is OK, provided you understand the risks and knowingly choose to accept them.

The problem is that many people rely on AI for legal advice without understanding the downside or how things can go wrong. In other words, “caveat usor” – user beware.

Many businesspeople use AI, and wisely so. It is part of the future of business.

Be careful what you ask AI, because what you ask and what AI answers may come back to bite you later.

When people consider the risks of using AI rather than an attorney, they usually focus on substance. For example, if AI drafts a contract, will it include the right terms? Will the contract be enforceable? Will it guarantee I get paid?

In other situations, business owners ask AI questions about legality: Is this activity legal or illegal? Could I be exposed to liability? Could the government impose a fine, revoke a license, or – at the extreme – could someone go to jail?

These questions come up somewhat regularly, particularly in highly regulated industries and government contracting. And this is where one of the most significant differences between AI and an actual human attorney comes into play.

Privileged communications

A major benefit of working with an actual attorney is that communications made for the purpose of obtaining legal advice are privileged.

When a communication is privileged, another party – such as the government or an opposing litigant – generally cannot force disclosure of those communications. Attorney-client privilege typically applies to confidential communications between an attorney and client made for the purpose of obtaining legal advice.

There are exceptions to privilege. The most common and significant is waiver. Privilege is waived when a client shares privileged information with someone who is not their attorney.

So what does this mean when you use AI to obtain legal advice?

AI tools – ChatGPT, Claude, or others – are not attorneys, although they may, at times, sound as smart as attorneys and be easier to understand.

When you seek legal advice from AI, neither the prompt nor AI’s response are privileged. As a result, those communications can be used against you in a dispute or investigation. An opposing party or the government may ask what you typed, what the AI said, and how you relied on that information. In some cases, they could even seek access to your computer or subpoena records from the AI provider.

Another problem arises when users input information received from their attorney into an AI prompt. Perhaps you want to double-check your lawyer’s advice or explore alternative approaches? By sharing your attorney’s advice with AI, you may waive the attorney-client privilege.

What you share with many AI platforms is not “confidential” under the law. Confidentiality is not determined by whether others can easily see the information.

Courts are likely to conclude that an AI provider’s access to your data defeats any reasonable expectation of privacy. With that, the privilege is waived. Likely, from a legal standpoint, sharing information with AI is no different than sharing it with a friend.

It is also important to understand that communicating non-privileged information to your attorney does not retroactively make it privileged. Sending AI-generated legal analysis to your lawyer after the fact does not cure the waiver problem.

Using it wisely

AI is here to stay, and its use will only increase. That said, using AI wisely is critical.

Until the law catches up with the AI revolution, businesspeople should be aware that replacing a human attorney with AI carries significant risks. You may believe those risks will never affect you.  Hopefully you are right. But if you are wrong, the consequences could be severe.

Interestingly, if you ask AI whether it can provide legal advice, it will often disclaim responsibility with a warning such as: “I am not an attorney, and this information is for educational purposes only. It does not create an attorney-client relationship and should not replace advice from a qualified attorney.”

If you are willing to trust AI to draft your business contract or otherwise answer a legal question, perhaps you also should trust it when it tells you that it should not replace a qualified attorney.

Shea Meehan is an attorney and the director of planning at Cornerstone Wealth Strategies, headquartered in Kennewick and servicing clients nationwide.