Every time you paste contract text into an AI tool, you hand confidential client data to a third party. Here is exactly how moderation layers solve this, and what to look for when evaluating legal AI vendors.The Moderation Layer Approach
A standard commercial contract is one of the most information-dense documents a business produces. A single SaaS agreement or M&A purchase agreement might contain the names of every party and their executives, the exact deal value, indemnification caps, IP assignment terms, termination triggers, and jurisdiction-specific compliance language. That is exactly the kind of data that attorney-client privilege exists to protect.
Now consider what happens when a lawyer or legal ops team pastes that contract into ChatGPT, Gemini, or any LLM-powered review tool with no intermediary privacy layer. The full text, every sensitive data point included, travels to the LLM provider's servers. Three things can go wrong from there.
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