Someone at Your Law Firm or CPA Firm Put Client Information Into an AI Tool
Nobody meant anything by it. A paralegal pasted a deposition transcript into a public chatbot to get a summary. A staff accountant dropped a client’s return into one to draft the cover letter. It saved an hour, the output was good, and the client information is now somewhere the firm does not control and cannot describe.
That is the trigger. Not a breach, not a complaint — the moment a partner or a shareholder asks where the client’s information went, and nobody can say.
The question that follows is not whether AI tools are allowed. It is whether the firm can show what it did with the client’s information, and whether that squares with what the rules that reach it require.
Why this is a confidentiality question, not a technology question
A public AI service is a third party. When client information is entered into one, it leaves the firm’s systems and lands on the service’s, under the service’s terms, for whatever the service’s terms say it can be used for. Some services train on what is entered. Some retain it. Some allow neither, on a paid tier, under a written agreement. The free tier and the paid tier of the same product can differ on exactly this point.
The firm does not get to decide what happened to the information after the fact. It only gets to decide, in advance, which services it uses and on what terms.
That is the same decision the firm already makes about every vendor that touches client information. The AI tool is not exempt from it because it is new, or because it is convenient, or because the person using it did not think of it as a vendor.
What the rules that reach a law firm say
The Texas Disciplinary Rules of Professional Conduct state duties that bear on this directly:
- Rule 1.05, confidentiality of client information
- Rule 1.01, competence
- Rule 5.01, the responsibilities of partners and supervisory lawyers, which is how the rules reach a firm rather than only an individual
- Rule 5.03, responsibilities regarding nonlawyer assistants
The State Bar’s Professional Ethics Committee has issued a chain of opinions on technology — sharing client material with independent contractors, email, cloud services, technological competence — and in 2025 it addressed generative AI directly. The opinions are interpretive rather than binding. What they establish is that the question has been asked and answered by the Committee; a firm cannot treat it as an open one.
Rule 5.03 reaches the paralegal in the opening example. A lawyer who retains a nonlawyer must make reasonable efforts to ensure that person’s conduct is compatible with the lawyer’s own obligations. Whether a given use of a given AI tool met that standard is for the firm’s counsel or the State Bar. Whether the firm can show what the nonlawyer did, and under what rule, is a question of records — and that part the firm can fix.
What the rules that reach a CPA firm say
The Texas State Board of Public Accountancy’s Rules of Professional Conduct are binding rules, not guidance. Three bear on this directly.
Confidentiality, §501.75. A licensee may not voluntarily disclose confidential client information to a third party without the client’s written permission. The rule expressly reaches disclosures to contractors, subcontractors and affiliates inside or outside the United States, and disclosures made for the firm’s own internal, administrative or compliance purposes. Whether entering client information into an AI service is a disclosure under this rule is a question for the firm’s counsel — but the rule does not carve out software, and it does not carve out convenience.
Acting through others, §501.77. The conduct of a non-CPA owner or employee in the business of a licensed firm is the firm’s conduct. The staff accountant in the opening example is, for the Board’s purposes, the firm.
Competence, §501.74.
Separately, for any firm that prepares tax returns, Internal Revenue Code §7216 makes it a misdemeanor for a preparer to knowingly or recklessly disclose or use tax return information other than as the regulations permit, with a civil penalty under §6713 alongside it. The regulations list the disclosures that are permitted without consent and set out what a valid consent has to contain. The regulations also reach auxiliary service providers, including software developers. Where an AI service sits in that structure for a given use is a question for counsel. That it sits somewhere in it is not.
The Board’s confidentiality rule is stricter than §7216. A disclosure §7216 permits without consent can still require the client’s written permission under §501.75. A CPA firm has to satisfy both.
What Texas law says, for both
The Texas Responsible Artificial Intelligence Governance Act took effect on January 1, 2026, and it reaches any person who conducts business in Texas. What it prohibits for a private firm turns on intent — using an AI system to manipulate, to discriminate, or to produce unlawful content — and it is enforced by the Attorney General, with a cure period. It also lets a licensing authority sanction its own licensees. For a law firm that is the State Bar; for a CPA firm it is the Board.
Texas breach notification law reaches any person who conducts business in Texas and owns or licenses computerized data containing sensitive personal information. There is no registration test and no size test in that statute.
And one thing on the machines themselves. Some current Windows computers ship with a feature that takes a screenshot of the display every few seconds and indexes the text in it, so the user can search their own past activity. On a machine used for client work, that is a second copy of every document, return and account screen viewed on it — outside the firm’s data map, its retention schedule and its records policy, whether or not anyone ever uses an AI tool on purpose. We turn it off on every machine we touch, and we document that it is off.
One thing we do not do. We do not tell you whether a given use of a given AI tool is a disclosure under the Disciplinary Rules, the Board’s rules or §7216, and we do not tell your lawyers or your CPAs what they may do. That judgment belongs to your own counsel or to your licensing body, never to your IT provider. What we can do is establish which tools are in use, what goes into them, under what terms, and write that down so the question can be answered.
What to do this week
Find out what is actually in use. Which AI services, by whom, on which machines, with what kinds of client information. Every other step depends on this one.
Read the terms of each one. Whether it trains on what is entered, whether it retains it, and for how long. Whether the paid tier differs from the free one. Whether there is an agreement the firm can sign that changes the answer.
Decide, and write it down. Which tools are approved, for which uses, with which information. What is not allowed at all. Who approves a new one. That decision is the firm’s and its counsel’s; the document is what makes it enforceable.
Put the decision on the machines. Approved tools available, everything else blocked at the browser or the network, the on-device capture feature off. A policy nobody can break by accident is worth more than one everybody has signed.
Keep the record. Which tools, which terms, which version of the policy, when it was reviewed. That is the file the partner or shareholder asks for the next time the question comes up.
See the eleven obligations that reach Texas legal and financial firms →
How Briggs IT Services helps
We start with a Compliance Readiness Review. We gather what your firm actually has — including which AI tools are in use and on what terms — then review it against what Texas law and your licensing body’s rules state as duties for your firm.
You get a written report: what the firm can show today about where client information goes, where the gaps are, and what closing each one takes.
From there we create the plan. If you have IT, internal or outside, we guide them through the changes and they do the hands-on work. Your IT keeps doing their job. If you have no IT, we do the hands-on work ourselves, inside a scoped remediation phase with a defined end.
Then we build the documentation — the AI use policy, the vendor record for each approved tool, the endpoint configuration standard — and we keep it current.
Common questions
Is it against the rules to use AI tools at a law firm or a CPA firm?
No rule that reaches a Texas law firm or CPA firm bans the tools. The rules reach what happens to client information. Whether a particular use of a particular tool is a disclosure, and whether it needed consent, is a question for your counsel or your licensing body.
The AI vendor says it does not train on our data. Is that enough?
That is a term of service, and it is one of the facts the firm should record. Whether it is enough under the rules that reach you is for your counsel. What the firm can do regardless is keep a copy of the terms it relied on, dated, so the answer can be shown later.
Our staff used a free AI tool with client information before we had a policy. What now?
Establish what was entered, into which service, under which terms, and when. Then take that record to your counsel. For a CPA firm the Board’s rules attribute an employee’s conduct to the firm; for a law firm Rule 5.03 reaches a nonlawyer’s conduct through the supervising lawyer. In both cases the firm’s position is better with a record than without one.
Does a written AI use policy have to ban public AI tools?
That is the firm’s decision, and its counsel’s. What a workable policy has to do is say which tools may be used, with what information, on what terms, and how the output is checked — and then be enforced on the machines, not only signed.
What is the on-device capture feature, and why do you turn it off?
A feature on some current Windows machines that screenshots the display every few seconds and indexes the text so the user can search their past activity. On a machine used for client work that is a second, undeclared copy of everything viewed on it. We turn it off on every machine we touch, document that it is off, and re-check it, because a system update can turn it back on.