startup / venture lawyering @lowensteinllp not legal advice enjoys pizza

Burlingame, CA
Joined February 2009
Carl Hessler retweeted
Are you talking to AI about legal matters? Be careful. He chatted with Claude about his legal strategy. Then discussed with his lawyers. A Federal judge just ruled that those AI chat logs have zero legal privilege
Your AI conversations aren't privileged. Yesterday, Judge Jed Rakoff ruled that 31 documents a defendant generated using an AI tool and later shared with his defense attorneys are not protected by attorney-client privilege or work product doctrine. The logic is simple: an AI tool is not an attorney. It has no law license, owes no duty of loyalty, and its terms of service explicitly disclaim any attorney-client relationship. Sharing case details with an AI platform is legally no different from talking through your legal situation with a friend (which is not privileged). You can't fix it after the fact, either. Sending unprivileged documents to your lawyer doesn't retroactively make them privileged. That's been settled law for years. It just hadn't been tested with AI until now. And here's what really hurt the defendant: the AI provider's privacy policy (Claude), in effect when he used the tool, expressly permits disclosure of user prompts and outputs to governmental authorities. There was no reasonable expectation of confidentiality. The core problem is the gap between how people experience AI and what's actually happening. The conversational interface feels private. It feels like talking to an advisor. But unless you negotiate for an enterprise agreement that says otherwise, you're inputting information into a third-party commercial platform that retains your data and reserves broad rights to disclose it. Judge Rakoff also flagged an interesting wrinkle: the defendant reportedly fed information from his attorneys into the AI tool. If prosecutors try to use these documents at trial, defense counsel could become a fact witness, potentially forcing a mistrial. Winning on privilege doesn't make the evidentiary picture simple. For anyone advising clients or managing legal risk, this is a wake-up call. AI tools are not a safe space for clients to process their counsel's advice and to regurgitate their legal strategy. Every prompt is a potential disclosure. Every output is a potentially discoverable document. So what do we do about it? First, attorneys need to be proactive. Advise clients explicitly that anything they put into an AI tool may be discoverable and is almost certainly not privileged. Put it in your engagement letters. Make it part of onboarding. Don't assume clients understand this, because most don't. Second, if clients want to use AI to help process legal issues (and they clearly will, increasingly), then let's give them a way to do it inside the privilege. Collaborative AI workspaces shared between attorney and client, where the AI interaction happens under counsel's direction and within the attorney-client relationship, can change the analysis entirely. I'm excited to be planning this kind of approach, and I think it's where the industry needs to head. storage.courtlistener.com/re…
94
681
101
3,722
774,640
🧵We (@close_first (FCP) & @LowensteinLLP, with FCP's @thebetsyz & @carohuaranca) reviewed data on the management fees that 750 VC funds proposed to LPs, based on VCs that had completed our First Close Partners "intake form." The form is on our site here: firstclosepartners.com/conta…
5
10
4
61
18,935
📢emerging fund managers
THREAD FOR LPs/GPs in VC: 1) I've been talking to VC fund managers (GPs)& the limited partners ("LPs") who invest in them (I'm an LP in numerous VC funds) about expectation for early DPI from seed&pre-seed funds. (DP ="Distributed to Paid In Capital" - i.e., cash $ back to LPs)
2
86
Carl Hessler retweeted
introducing cymbal 🎉 the human readable block explorer.
41
90
33
247
66,482
Thrilled to share some insight here on navigating the current #VentureCapital markets 🚀📚💼
LS partner @chessler authors an article in @VCJournal on navigating down rounds in #VentureCapital markets, including deal terms and structures, governance matters, and fiduciary duties. bit.ly/44gbF2j#techlaw
78
Carl Hessler retweeted
We’re live! 🚀 Excited to announce $4.3M in funding led by @TCG_Crypto to bring blockchain-based financing to emerging markets and connect capital with small businesses around the globe. 🌍 Thanks @AnnieNjanja for sharing our story in @TechCrunch 🥳 techcrunch.com/2023/05/17/ji…
18
32
27
162
49,843
Amidst the #SVB fallout, LS's #AntiMoneyLaundering (AML) team addresses the standard reqs, info & documentation necessary to efficiently address #bank onboarding, AML & KYC reqs when diversifying #banking relationships in today's client alert. bit.ly/42cHWHr
1
4
183
Join us tonight @ 9pm EDT/ 6PM PDT to discuss SVB FALLOUT-Special @VentureCrushFG-How VC-backed Startups Can Extend Payroll, Avoid Furloughs, Take/Give Loans & other questions re SVB! by @LowensteinLLP REGISTER for the zoom here:my.lowenstein.com/18/4460/la…
1
11
7
25
11,836
"SVB Fallout: VC-backed Startups May Extend Payroll & Avoid Furloughs" discusses state law & #FLSA issues for startups confronting how to make payroll in light of the SVB freeze, w @MaiminRachel lowenstein.com/news-insights…
9
4
14
11,330
First two minutes of this clip is me during game 1 while my kids watch rescue riders: heroes of the sky youtu.be/XI_4HtIJYDM
1
My collegiate coach Dick Jochums died August 19th 2022 at age 81. Amazing man who taught the Greek warrior beliefs of Agon and Areté, struggle then excellence. It was always your journey in discovering your abilities and how good you want to be. Leave nothing on the field
1
6
Carl Hessler retweeted
“Hello there” through the years #obiwan #starwars
232
7,194
807
37,913
Lowenstein proudly rep'd @LayerZero_Labs in its $135M #SeriesA #financing co-led by @sequoia, @FTX_Official & @a16z. The round valued the omnichain #crypto network provider at $1B. @ericjasonweiner led the LS deal team. bit.ly/3JScfJI #venturecapital #startups
1
7
when snow falls, nature listens
1
11
GM!
1
5
1
36
Five weeks in, I'm seeing a theme. So far, a year of #startup legal mistakes that we @LowensteinLLP are helping to straighten out. Compiling a few highlights below so that others may see the light! #StartupLawyerPSA 🧵(1/8)
1
5
8
The regulatory landscape for #web3 companies is somewhere between nascent to nonexistent. Engage with startup lawyers that have business minded and highly experienced specialist teams (regulatory, tax, IP) down the hall to help navigate. (7/8)
1
3
The consequences of one wrong move can be extremely painful. It’s usually the same story - trying to cut costs on things that matter so often results in missteps that are significantly more costly to clean up in the end. (8/8)
3