Perth, Sept 30: If you’re a lawyer keen on using OpenAI’s new legal tools, an Australian startup says you should read the fine print first
The tech startup from Australia has fired a strong warning at law firms rushing to adopt OpenAI’s new legal tools, saying a US product launch is not an answer to Australian compliance questions.
OpenAI released Astra for Law on 17 September. It’s a version of its GPT-6 Astra model configured for legal work, with its own legal search index. But that index covers US law only, and the product is initially available only to selected US law firms.
“Astra for Law is a serious product built for American lawyers,” said Samuel Junghenn, founder and CEO of Quillio, whose company competes in the legal AI market. “A legal research tool that doesn’t know Australian law is a very good US tool.”
Stored here, processed elsewhere
Junghenn’s bigger concern is where client information is processed.
According to a Quillio discussion paper, ChatGPT Enterprise can store customer content in Australia but does not offer Australian processing. The paper says the other major AI subscriptions have similar limits: Anthropic’s Claude Team and Enterprise workspaces are US-based, and Google Workspace offers data regions in the US or EU only.
“Plenty of corporate and government clients require their data to stay in Australia,” Junghenn said. “A firm running those files through offshore processing may be breaching its own engagement terms without realising it.”
He also warned about new plugins that connect ChatGPT to law firms’ practice management systems. Once connected, he said, a client’s file is handled under another company’s terms, “and most firms won’t have read them.”
No blanket ban
The paper stops short of saying offshore processing is illegal. It notes there is no blanket Australian rule requiring law firms to keep all client data onshore, and that using enterprise AI does not automatically waive legal privilege.
The risk depends on each firm’s obligations, including privacy law, court orders, and contracts with clients that require data to stay in Australia.
“Sending data offshore isn’t automatically a breach. Not knowing where it went is the problem,” Junghenn said.
Regulators have also weighed in. The Law Society of NSW, the Victorian Legal Services Board and Commissioner, and the Legal Practice Board of WA have issued a joint statement on AI in legal practice, and both the Federal Court and the NSW Supreme Court have practice notes on how lawyers use AI.
“I’m not telling anyone to avoid ChatGPT,” Junghenn said. “I’m telling them an enterprise badge isn’t a confidentiality assessment. Ask every vendor the same questions, including us.”
The Quillio paper lists ten questions firms can put to any AI vendor, including where data is processed, who can access it, and how long it is kept.
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