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The Core Security & Compliance Questions to Ask Any AI Vendor

In the world of Alternative Dispute Resolution (ADR), confidentiality is not just a feature; it is the bedrock upon which the entire process is built. Parties agree to arbitrate or mediate in large part because of the promise of a private, confidential forum. The explosion of Legal AI and cloud-based ADR Platforms has brought incredible efficiency to the process, but it has also introduced a critical new vulnerability. A 2025 report on cybersecurity in the legal industry found that 40% of data breaches at law firms were linked to third-party vendor platforms. For U.S. lawyers and ADR professionals, the duty to protect client information under ABA Model Rule 1.6 now requires a new level of technological due diligence.

The Core Security & Compliance Questions to Ask Any AI Vendor

Before you upload a single client document to a third-party platform, you have an ethical obligation to conduct reasonable due diligence. This means going beyond marketing claims and asking specific, probing questions about their security architecture.

1. Where is My Data Stored and Who Owns It?

This is the most fundamental question. You need to know the physical and legal location of your data.
Key Considerations: Is the data stored within the U.S. to comply with data residency requirements? Does the vendor’s terms of service claim any ownership rights over your data or the right to use it for other purposes?
The NexLaw AI Standard: At NexLaw AI, your data is your data. Period. All client information is stored on a secure, U.S.-based cloud infrastructure. We have no ownership rights over your data and will never use it for any purpose other than providing the service you have paid for.

2. How is My Data Protected from Unauthorized Access?

Security is a multi-layered concept. You need to understand how the platform protects your data both from external hackers and unauthorized internal access.
Key Considerations: Is data encrypted both “at rest” (on the server) and “in transit” (as it moves between you and the server)? What level of encryption is used? Does the platform offer multi-factor authentication (MFA) and granular, role-based access controls?
The NexLaw AI Standard: We employ bank-grade, AES-256 bit encryption for all data, both at rest and in transit. Our platform includes mandatory MFA and allows you to set specific, role-based permissions (e.g., a paralegal can upload documents but cannot delete them), ensuring you have complete control over who can see and do what with your data.

3. Is My Data Being Used to Train AI Models?

This is a critical question for any generative AI platform. Many public AI models use user inputs to train their future versions, a practice that is completely unacceptable for confidential legal information.
Key Considerations: You need an explicit, unambiguous guarantee from the vendor that your confidential client data will never be used to train any public or shared AI models.
The NexLaw AI Standard: Our AI models are trained on a vast corpus of public, anonymized legal data. Your private client data is stored in a secure, isolated “tenant” that is completely separate from our core AI training environment. Your inputs are used to provide the service to you and you alone. They are never co-mingled or used for any other purpose.

4. What are Your Auditing and Compliance Certifications?

Independent, third-party audits are the best way to verify a vendor’s security claims.
Key Considerations: Does the platform have recognized compliance certifications, such as SOC 2 Type II, which audits security, availability, processing integrity, confidentiality and privacy? Is the platform HIPAA compliant for handling sensitive health information?
The NexLaw AI Standard: NexLaw AI is built on a SOC 2 Type II certified infrastructure, providing you with the peace of mind that comes from a rigorous, independent security audit. Our platform is also designed to be fully compliant with HIPAA and other industry-specific data protection regulations.

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A Practical Due Diligence Workflow

1. Review the Vendor’s Security Whitepaper:

The mediator’s job is to disrupt these patterns. AI can be a powerful tool in this disruption process.

3.Ask for a Compliance Report:

Request a copy of their latest SOC 2 report or other relevant certifications.

2.Scrutinize the Terms of Service and Privacy Policy:

Pay close attention to the sections on data ownership and use.

4.Conduct a Security Interview:

Don’t be afraid to have your IT team or a security consultant speak directly with the vendor’s technical team.

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Trust, but Verify

In the new era of Legal Tech, the adage “trust, but verify” has never been more relevant. The efficiency gains of AI are immense, but they can never come at the cost of your fundamental duty of confidentiality. By asking the right questions and choosing a platform that was built with “Confidentiality by Design,” you can confidently leverage the power of AI to enhance your ADR practice while ensuring your clients’ most sensitive information remains protected.

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