What happens to our data if an AI supplier stops trading?

If an AI supplier stops trading, your obligations to clients do not pause while you sort it out. The practical protection is to treat the tool as a place work passes through, not a place work is stored: keep the file complete on your own systems, agree in the contract what happens to data on termination, and avoid tying up money or process in a supplier you cannot leave at short notice. That way a supplier failure is an inconvenience rather than an incident.

This is the same discipline firms already apply to case management providers, cloud storage and outsourced typing. AI does not raise a new category of risk here. It raises an old one with a newer set of suppliers, some of them young.

Ask the exit questions before you buy

Most of the work happens before you sign. The questions are dull and short, and a serious supplier will answer them without fuss.

• Who is the contracting entity, where is it registered, and how long has it traded?
• Where is our data held, and who processes it?
• On termination, will you return our data, in what format, and how long do we have to retrieve it?
• When and how is data deleted, and will you confirm deletion in writing?
• What notice do you give if you withdraw the service?
• If the business is sold or enters an insolvency process, what happens to our data then?
• Is anything we need locked inside the product, or can we take it out as ordinary documents?

The last question matters most. If the only copy of a chronology, a research note or a set of calculations lives inside a supplier's system, the supplier's problems become your problems. If those outputs are saved to the matter file as you go, a shutdown costs you a tool, not a record.

A vague or irritated answer to any of these is itself information. So is a supplier who will discuss features for an hour but cannot say who owns the company.

Keep the file complete as you work

The strongest continuity plan is a habit rather than a clause. When a fee earner uses an AI tool to produce something that shapes the matter, the output belongs on the file: the draft, the note of key dates with the working, the summary that informed advice, and the record of what was checked and by whom.

Do that consistently and you can answer the awkward questions at any point. If a client asks in two years how a date was calculated, the answer is in the file. If a supplier disappears next month, nothing goes with it. If your insurer or a regulator asks how the work was done, you are not asking a third party for access to their system.

It also keeps you honest about what the tool is for. A tool that helps you produce work is easy to replace. A tool that quietly becomes your only record of the work is not.

Data protection duties do not transfer

Under UK GDPR the firm remains the controller of client personal data whether the supplier is thriving or in administration. Your processor arrangements should already cover security, sub-processors, location of processing, and return or deletion of data at the end of the service. Check that the deletion obligation survives insolvency in practical terms, not just on paper, and that you know who to contact if the usual support channel goes quiet.

The Information Commissioner's Office expects controllers to know where personal data sits and to be able to act on it. The Solicitors Regulation Authority expects firms to remain accountable for work carried out through third parties and to have arrangements that protect client interests if something goes wrong. Neither expectation is softened by the supplier being small or new.

If the worst happens, record what you did: when you learned of the closure, what data you retrieved, what confirmation of deletion you sought, whether any client information was exposed, and whether any client needs to be told.

How you pay changes how exposed you are

A long prepaid contract with a young supplier concentrates risk. If the company fails, you are an unsecured creditor for the unused portion and you still have to find a replacement. Annual licences bought for the whole firm compound that: you may be paying for seats that stopped working in month three.

Shorter commitments, or paying for what you use, keep the loss small and the decision reversible. Consider also whether the supplier holds anything you would need to buy back, and whether your staff would face a hard stop or a graceful wind-down. A tool used through a browser with work saved out to your own file system tends to wind down gracefully. One that has absorbed your precedents, your matter data and your workflow does not.

Review the arrangement once a year alongside your other supplier checks. Confirm the contact details still work, the terms have not changed, and someone at the firm knows how to export what matters.

Where Alesis fits

Alesis is an AI assistant for UK law firms, made by L25 Limited, used through the web browser, with one conversation for a matter. It answers questions about a matter from the matter's own papers and names the page each answer came from, so the substance of the work can be saved into the file you keep and control. The firm's information is held in the UK and processed only in the UK and the EU, kept apart from every other firm, and never used to train anything for anyone else. Alesis is funded by credit, not a subscription: nothing recurs, there are no feature tiers, and the firm tops up only when it chooses.