“Exxon Drops Paul Weiss, Shifts Climate Suits Defense Work” —

• “Exxon Mobil Corp. is replacing Paul Weiss as its lead legal counsel in US climate change litigation and giving the work to boutique law firm Hueston Hennigan.”
• “The company is making the move for cost purposes and wants more engaged outside counsel at the trial level, according to three people familiar with the matter, who requested anonymity to discuss a change that hasn’t been announced.”
• “The swap in the company’s national coordinating counsel is not related to revelations early this month that former Paul Weiss leader Brad Karp assisted disgraced financier Jeffrey Epstein, according to the people. The disclosures in Justice Department files prompted Karp to step down from his chairman role on Feb. 4.”
• “The move comes as sprawling climate change cases against Exxon and other oil giants play out in different courts, and after Paul Weiss cemented its position as a corporate counsel for Exxon rival Chevron Corp.”
• “Chevron tapped Paul Weiss to handle several major engagements since Barshay was hired, such as its $5 billion acquisition of Noble Energy Inc. in 2020 and an ill-fated $33 billion bid for Anadarko Petroleum Corp. the year prior.”
• “Exxon and Chevron developed a schism in late 2023 that involved access to offshore oilfields in Guyana. Exxon filed an arbitration case that was called one of the most notable disputes in the energy industry in decades.”
• “Exxon lost the 20-month feud and now shares Guyana’s oil-rich coastal waters, a region that neighbors Venezuela, with Chevron and Cnooc Ltd., a Chinese company that merged its arbitration claims with Exxon.”
• “Exxon, however, was never directly adverse to Chevron in the arbitration proceeding, although the latter supported Hess in the matter, said two people familiar with the dispute. Paul Weiss has sought to de-conflict its position between oil and gas titans by handling litigation for Exxon and deal work for Chevron, an arrangement that in the insular US energy sector is not unusual.”
• “‘It’s not uncommon to be friends and allies on one deal and enemies on yet another,’ said Ed Hirs, an energy industry expert at the University of Houston.”
• “Christopher Kulander, a senior lecturer at the University of Texas School of Law and of counsel at Houston’s Oliva Gibbs, said energy companies tend to be most concerned about conflicts in litigation, not deal work, and that despite bitter disagreements on some issues there can still be cooperation elsewhere.”

“Your AI Conversations Are Not Privileged: What a New SDNY Ruling Means for Every Lawyer and Client” —

• “A federal judge just confirmed what many suspected, but few wanted to hear: conversations with AI tools are not protected by attorney-client privilege. On February 10, in United States v. Heppner, Judge Jed Rakoff of the Southern District of New York ruled that dozens of documents a criminal defendant generated using a non-enterprise consumer version of Anthropic’s Claude are neither privileged nor protected as ‘work product.’ The decision is the first of its kind, and its reasoning should affect how every attorney advises clients about AI.”
• “(It also builds on a trend in the same court, where Judge Oetken recently ruled that 20 million ChatGPT conversation logs are likely subject to compelled production in the OpenAI copyright litigation, finding that users have a ‘diminished privacy interest’ in their AI conversations.)”
• “Bradley Heppner, a Dallas financial services executive charged with securities fraud and wire fraud, used the popular AI LLM Claude to research legal questions related to the government’s investigation after receiving a grand jury subpoena and engaging counsel, but before his arrest. He fed information he had learned from his defense counsel at Quinn Emanuel into the AI tool, generated 31 documents of prompts and responses, and then transmitted those documents to his lawyers. When the FBI seized the documents during a search of Heppner’s home, his attorneys asserted the attorney-client privilege and work-product protection.”
• “No attorney was involved. An AI tool is not a lawyer. It has no law license, owes no duty of loyalty, cannot form an attorney-client relationship, and is not bound by confidentiality obligations or professional responsibility rules. Discussing legal matters with an AI platform is legally no different from talking through your case with a friend.”
• “Not for the purpose of obtaining legal advice. Anthropic’s own public materials state that Claude follows the principle of choosing the ‘response that least gives the impression of giving specific legal advice.’ The tool explicitly disclaims providing legal services. You cannot claim you used a tool for legal advice when the tool itself says it does not provide it. Claude’s terms were specifically highlighted by the government, which directly undermined the claim that Heppner was seeking legal advice from the tool.”
• “Not confidential. This is the finding with the broadest implications. Anthropic’s policy expressly states that user prompts and outputs may be disclosed to ‘governmental regulatory authorities’ and used to train the AI model. Judge Rakoff found there was simply no reasonable expectation of confidentiality. As he put it, the tool ‘contains a provision that any information inputted is not confidential.'”
• “This is not unique to Claude. OpenAI’s privacy policy contains comparable provisions permitting data use for model training and disclosure in response to legal process. And the distinction between free and paid plans matters less than many assume. Both Anthropic and OpenAI use conversations from free and individual paid plans (Claude Free, Pro, and Max; ChatGPT Free, Plus, and Pro) for model training by default. Users can opt out, but opting out of training does not eliminate the platforms’ rights to disclose data to government authorities or in response to legal process. Only enterprise-tier agreements (ChatGPT Enterprise and Business; Claude’s commercial and government plans) exclude user data from training by default and offer contractual confidentiality protections. A $20-per-month subscription does not buy you privilege.”
• “Pre-existing documents cannot be retroactively cloaked in privilege. The AI-generated documents were created by Heppner before he transmitted them to counsel. Sending these unprivileged materials to his lawyers after the fact did not retroactively make them privileged. This is a long-settled principle that applies equally to AI outputs.”
• “The work-product doctrine fared no better. Defense counsel conceded that Heppner created the documents ‘of his own volition’ and that the legal team ‘did not direct’ him to run the AI searches. Without attorney direction, work-product protection does not attach. As the government noted, if counsel had directed Heppner to run the AI searches, the analysis might be different.”
• “Judge Rakoff flagged a practical complication the government may not have anticipated. Because the AI documents incorporate information counsel conveyed to Heppner, using those documents at trial could require Heppner’s lawyers to testify about what they told their client. That witness-advocate conflict could cause all kinds of complications. Winning on privilege, the judge warned, does not make the evidentiary picture simple.”
• “Perhaps the most troubling aspect of the ruling is its implication for waiver. Heppner fed information he had received from his attorneys into Claude. The government argued, and Judge Rakoff agreed, that sharing privileged communications with a third-party AI platform may constitute a waiver of the privilege over the original attorney-client communications themselves. The privilege belongs to the client, but so does the responsibility to maintain it.”
• “If you are an attorney: Advise clients explicitly that anything they input into an AI tool may be discoverable and is almost certainly not privileged. Consider putting this in your engagement letters. Make it part of client onboarding. Do not assume clients understand the distinction between a private-feeling interface and an actual confidential communication.”
• “If you manage legal risk: Audit your organization’s AI usage policies. Consumer-grade AI tools with standard terms of service offer no confidentiality protections. Enterprise agreements with contractual confidentiality provisions may change the analysis, but standard accounts do not.”
• “If you use AI for legal work: Understand that the conversational interface creates a dangerous illusion of privacy. Every prompt is a potential disclosure. Every output is a potentially discoverable document.”

“ABA Formal Opinion 521 Re: Judicial Canons of Ethics applying to administrative, supervisory role” —

• “The American Bar Association Standing Committee on Ethics and Professional Responsibility released a formal opinion that provides guidance on the ethical obligations of judges under the ABA Model Code of Judicial Conduct when exercising administrative, employment and supervisory authority.”
• “Formal Opinion 521 says that the canons and rules governing impartiality, integrity and independence — particularly Canons 1 and 2 and associated rules — require judges to administer chambers and court staff with the same fairness and neutrality that guide adjudication. This opinion explains that ethical duties extend beyond the courtroom to include merit-based appointments, the prevention of bias and harassment and the avoidance of favoritism or the appearance of impropriety in all administrative decisions. Judges fulfill these obligations by ensuring that their use of administrative authority promotes public confidence in the judiciary’s independence and integrity.”
• “The opinion notes that ‘Judges occupy a unique public trust: they must decide controversies impartially and must also administer the courts in a manner that sustains the public’s confidence in the independence, integrity and impartiality of the judiciary.’ The Model Code of Judicial Conduct makes plain that those obligations reach beyond adjudication to embrace the full scope of judicial administration. Canon 1 and Rule 1.2 require judges to avoid impropriety and the appearance of impropriety; Canon 2 and Rule 2.3 require that judges perform all duties of office — adjudicative, administrative and supervisory — without bias or prejudice; Rule 2.12 imposes affirmative supervisory duties; and Rule 2.13 requires that appointments be made impartially and on the basis of merit. Together, these provisions create an affirmative, institutionally focused ethical mandate: judges must ensure that both their own conduct and the conduct of those they supervise preserve the fairness and legitimacy of the courts.”
• “Applied here, that mandate means (1) avoiding administrative actions that convey favoritism, partiality or the use of judicial prestige for private ends; (2) making hiring, appointment and personnel decisions on objective, merit-based criteria; and (3) actively supervising and correcting discriminatory, harassingor retaliatory conduct within chambers. The illustrations in this opinion demonstrate how apparently discrete administrative acts (or the failure to act) — when motivated by nepotism, ideology or personal loyalty —can produce precisely the appearance of partiality that the code forbids and how patterns of such conduct can erode institutional integrity even where no single act violates a particular rule.”
• “This opinion affirms that preserving public confidence in the judiciary requires attention to both substance and perception. Judicial fairness must be real, and it must be seen to be real. When judges administer their chambers with impartiality, competence and diligence, they not only fulfill individual ethical obligations but also strengthen the judiciary’s collective standing as an institution worthy of public trust.”
• “The standing committee periodically issues ethics opinions to guide lawyers, courts and the public in interpreting and applying ABA Model Rules of Professional Conduct. Other recent ABA ethics opinions are available here.”