# California’s SB 574 bars lawyers from entering confidential client information into AI tools that are not access-restricted

> Signed on 30 September 2026, SB 574 sets duties for California lawyers using generative AI from 2027: confidentiality, verification of output and disclosure.

FireAI Security & Research Team (HisnLabs) · Published 2026-10-08
Canonical: https://hisnlabs.com/en/news/california-sb-574-lawyers-generative-ai-confidential-information

California Governor Gavin Newsom signed Senate Bill 574 on 30 September 2026, which Bloomberg Law describes as first-in-the-nation legislation regulating attorneys’ use of generative AI [[1]](https://news.bloomberglaw.com/business-and-practice/newsom-signs-first-of-its-kind-bill-on-lawyer-arbitrator-ai-use). The law takes effect on 1 January 2027 and sets duties on confidentiality, verification of AI output, disclosure to courts and citations [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai). Its confidentiality rule turns the question of where a client’s information goes when an AI tool processes it into a professional obligation.

## Background

Courts in the United States have dealt with filings that contained citations invented or misread by AI tools; Bloomberg Law notes that in the two months before the signing, federal courts warned or sanctioned attorneys in bias, bankruptcy and Justice Department cases [[1]](https://news.bloomberglaw.com/business-and-practice/newsom-signs-first-of-its-kind-bill-on-lawyer-arbitrator-ai-use). Lawyers are also bound by duties of confidentiality towards their clients. A general-purpose AI service processes what it receives on its provider’s servers, under the provider’s terms, which is why the data-handling of the tool becomes a question for the lawyer.

## What the law provides

New Business and Professions Code Section 6068.1 provides that an attorney “shall not delegate the practice of law” to generative AI [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai). Under the same section, according to Holland & Knight, an attorney may not enter confidential, nonpublic or personally identifying information into a generative AI system unless access is restricted to the attorney and authorised persons who are themselves subject to confidentiality obligations. The text quoted by Bloomberg Law allows tools that are “restricted to the attorney and persons authorized by the attorney under obligations to protect the confidentiality” [[1]](https://news.bloomberglaw.com/business-and-practice/newsom-signs-first-of-its-kind-bill-on-lawyer-arbitrator-ai-use) [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai).

Attorneys must take reasonable steps to verify AI output, including case and statutory citations. An amendment to Code of Civil Procedure Section 128.7 prohibits filings in any California court from containing a citation that the responsible attorney has not personally verified. Attorneys who use generative AI must disclose that use to the court “for all documents submitted to the court” [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai). Arbitrators may not delegate their decision-making to AI tools or rely on AI-generated information without disclosing it to the parties [[1]](https://news.bloomberglaw.com/business-and-practice/newsom-signs-first-of-its-kind-bill-on-lawyer-arbitrator-ai-use).

Holland & Knight writes that the confidentiality provision makes an AI system’s data-handling practices relevant to professional compliance and “may preclude certain publicly available consumer AI tools”. It recommends that attorneys, before 1 January 2027, review their AI systems’ parameters and security features, define permitted inputs, establish review and citation-verification protocols, and decide how court disclosures will be made [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai).

> PrivateAI, a Mac app by HisnLabs for lawyers, notaries and accountants, summarises, translates and drafts from client documents with an AI model that runs on the Mac, with no cloud fallback. A 17-day demo is available. [Download FireAI for Mac](https://hisnlabs.com/fireai/en/download)

## Implications for law firms

The law applies to attorneys practising in California. For them, the choice of AI tool becomes part of the confidentiality analysis: before client material is entered, the attorney needs a basis to conclude that access to it is restricted as the statute requires. Holland & Knight points out open questions, including what counts as delegating the practice of law and how much AI involvement triggers the court disclosure duty. Lawyers elsewhere are not bound by SB 574, but they face the same practical question under their own professional rules: who, other than the lawyer, can access what is typed into the tool.

## Recommendations

1. List the AI tools used in the firm and, for each, where documents and prompts are processed and who can access them.
2. Define which categories of client information may be entered into which tool, as Holland & Knight suggests.
3. Verify every citation personally before filing, whatever its source.
4. Prepare a disclosure practice for court filings prepared with generative AI before 1 January 2027.
5. Ask counsel or the bar for guidance on the provisions the statute leaves undefined.

## Relevance to PrivateAI

PrivateAI 1.0.0 runs its AI model, Gemma 4 E2B, on the Mac, with no cloud fallback and no telemetry, and its logs never contain document text. It goes online only to download the model once, for licence and update checks, and to open a payment page, and none of these sends a document, a prompt or a result. It checks every amount, date and reference in a result against the original by fixed rules, and marks each result as a draft for the professional to check. HisnLabs makes no claim that using PrivateAI satisfies SB 574 or any other rule: whether a tool meets the statute’s access restriction is for the attorney to assess. Purchase of PrivateAI is not open yet.

> PrivateAI keeps contracts, deeds and accounts on the Mac while it summarises or translates them, and checks every amount and date against the original. Try every feature free for 17 days. [Download FireAI for Mac](https://hisnlabs.com/fireai/en/download)

## Limitations

This item relies on Bloomberg Law’s report and on Holland & Knight’s client alert, not on the enrolled bill text, which was not reviewed here [[1]](https://news.bloomberglaw.com/business-and-practice/newsom-signs-first-of-its-kind-bill-on-lawyer-arbitrator-ai-use) [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai). Holland & Knight identifies a possible drafting issue in the amendment to Section 128.7 and undefined terms such as “delegate”, which courts or the legislature may clarify [[2]](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai). How the confidentiality rule applies to particular products will depend on interpretation that does not yet exist.

To work on client documents with an AI model that runs on the Mac, [download PrivateAI](https://hisnlabs.com/privateai/en#download) and try every feature free for 17 days. PrivateAI is made by HisnLabs.

## Sources

- [Bloomberg Law, 30 September 2026 (updated 1 October): Newsom Signs First-of-Its-Kind Bill Governing Lawyer AI Use](https://news.bloomberglaw.com/business-and-practice/newsom-signs-first-of-its-kind-bill-on-lawyer-arbitrator-ai-use)
- [Holland & Knight, 1 October 2026: California Enacts Rules Governing Lawyers’ Use of Generative AI](https://www.hklaw.com/en/insights/publications/2026/10/california-enacts-rules-governing-lawyers-use-of-generative-ai)