Clients have started asking how their suppliers use AI. It shows up in vendor questionnaires, in procurement forms, and in redlines on renewal contracts. If your agreements say nothing, the client fills the gap with their own wording, and their wording is usually written for a company with a legal department.

A short AI clause of your own fixes that. It tells clients what you do, what you will not do, and what happens if they want out. Most small firms can cover it in four or five paragraphs. Have your lawyer review the final text, because contract law and privacy rules vary by state and industry, but walk in with a draft.

Start with what you actually use

You cannot write an honest clause until you know which tools touch client work. List every AI tool anyone on staff uses for client material: the chatbot, the meeting note taker, the AI features inside your accounting or document software, the transcription app on someone's phone. For a 20 person firm this list is usually between four and ten items.

For each tool, write down three things: whether it is a business account or a personal one, whether the vendor trains on your data, and where the data is stored. Business tiers of the main assistants run roughly $25 to $40 per user per month and generally exclude your data from training by default. Free and personal tiers often do not. Do this inventory before you draft a single sentence.

Name the tools as subprocessors

A subprocessor is any outside company that handles your client's data on your behalf. Your email host and cloud storage are already subprocessors. AI vendors are the same thing and should sit on the same list.

The clause should say that you use third party AI services to help deliver the work, that those services are listed in a schedule or on a web page you keep current, and that you will tell clients before adding a new one. Thirty days notice is a common window. Keep the list on a page you can update without reissuing every contract. Publish that page this week.

Say what never goes in

Clients care less about which tool you use than about what you put into it. Write the limits in plain terms:

  • Client data goes only into tools on the approved list, on business accounts.
  • No approved tool may use client data to train its models.
  • Credentials, payment card numbers, and health information never go into an AI tool unless the client agrees in writing and the tool is covered by the right agreement, such as a business associate agreement for health data.
  • A named person at your firm reviews any AI assisted output before it reaches the client.

Only promise what your team already does. If you write "a person reviews every output" and nobody does, the clause becomes evidence against you. Match each line to a habit your staff can confirm today.

Decide how you disclose

Some clients want to know when AI drafted something. Most do not need a note on every email. Pick one position and put it in the contract. A workable middle ground: you use AI tools to draft and summarize, a person reviews everything you deliver, and you will tell the client on request whether AI was used on a specific deliverable.

Some industries have stricter expectations. Lawyers face bar guidance on AI use, and regulated fields such as healthcare and finance may have their own disclosure duties. If you work in one of those, ask your lawyer which disclosures are required and write those in rather than the general version. Then make sure everyone on staff gives the same answer when a client asks.

Offer a real opt out

Some clients will say no to AI on their account. Treat that as a normal option, not a negotiation. The clause should say a client can opt out in writing, that you will stop using AI tools on their data within a set period such as ten business days, and that the opt out may change timelines or fees if the work takes longer by hand.

Before you offer it, check that you can honor it. An opt out means turning off the AI note taker on that client's calls and keeping their files out of tools that index everything automatically. Write down which settings change for an opted out client so the account lead does not have to work it out under pressure.

Plan the rollout

Put the clause into new contracts first. For existing clients, send a short letter or email explaining the change and the opt out, and add the clause at renewal.

Review the clause and the subprocessor list twice a year. AI vendors change their terms often, and a tool that excluded your data from training last spring may have new settings this fall. Put the review date in your calendar now.

If you want help building the tool inventory and a first draft for your lawyer to review, the first call is free. Tell us how many people you have and which AI tools they use on client work, and we will tell you what the clause needs to cover and what you can leave out. Get in touch and we will find a time.