Using Local LLMs for Sensitive Data: A Guide for Professionals

The Privacy Dilemma for Professionals

As AI tools like ChatGPT have revolutionized workflows across industries, professionals handling sensitive information face a critical dilemma: How can you leverage the power of AI without compromising client confidentiality?

If you're a lawyer analyzing contracts, a doctor reviewing patient information, or a financial advisor handling sensitive financial data, uploading this information to cloud-based AI services creates significant privacy and confidentiality risks:

Your data may be stored on third-party servers
Your information could potentially be used to train future AI models
You might violate professional confidentiality obligations
Client trust could be compromised if they knew their sensitive information was being processed by external AI systems

The Solution: Running AI Models Locally

The good news is that you can now run powerful AI language models directly on your computer, keeping all sensitive data completely private. These "local LLMs" offer a compelling alternative to cloud-based options like ChatGPT when privacy is paramount.

This guide walks you through setting up your own private AI assistant using Ollama, a free tool designed to make local AI models accessible to non-technical users.

Step 1: Install Ollama

Visit Ollama's official website and download the installer for your operating system (Windows, Mac, or Linux). The installation process is straightforward and similar to any standard application.

Step 2: Open Your Terminal

After installation, you'll need to open a command-line terminal to run Ollama commands:

On Mac:

Press Command+Space to open Spotlight Search
Type "Terminal" and press Enter
Or find Terminal in Applications > Utilities

On Windows:

Press Windows+R to open the Run dialog
Type "cmd" and press Enter
Or search for "Command Prompt" in the Start menu

Don't be intimidated by the terminal! Think of it as the control panel for your AI assistant.

Step 3: Choose and Run Your Model

Select an AI model based on your computer's capabilities:

For powerful computers (modern machines with 16GB+ RAM):

ollama run deepseek-r1

For standard computers (or if you're unsure about your computer's capabilities):

ollama run deepseek-r1:1.5b

A good rule of thumb: If you have to wonder whether your computer is powerful... it probably isn't! When in doubt, use the smaller model.

Step 4: Start Using Your Private AI Assistant

Once the model is running, you can begin typing your questions and prompts directly in the terminal. The AI will respond there without sending any data over the internet.

You can:

Ask legal questions about contracts
Analyze confidential documents
Draft responses to sensitive communications
Summarize proprietary information
Get assistance with professional writing

All while keeping your information completely private.

Step 5: Exiting the Program

When you're finished, simply type "exit" and press Enter, or press Ctrl+C to stop the Ollama program and return to the normal terminal.

Privacy Benefits

The primary advantage of this approach is that your sensitive documents never leave your computer. This makes local LLMs ideal for:

Legal professionals working with confidential client information
Healthcare providers handling protected health information
Financial advisors working with personal financial data
Consultants analyzing proprietary business information
Government employees working with classified data

Limitations to Consider

While local LLMs offer significant privacy benefits, they do come with some trade-offs:

They may not be as powerful as the latest cloud-based models
They run at the speed of your computer (which may be slower)
They don't have access to real-time information from the internet
They require some minimal technical comfort with command-line interfaces

However, for professionals working with confidential information, these limitations are often a reasonable trade-off for the privacy benefits gained.

Getting Started Today

If you work with sensitive information and have been hesitant to use AI tools due to privacy concerns, local LLMs provide a compelling solution. The entire setup process takes less than 10 minutes, and you'll have a powerful AI assistant that respects your confidentiality obligations.

Give it a try, and experience the productivity benefits of AI without the privacy concerns!

Have questions about setting up your private AI assistant? Feel free to reach out directly. I'm happy to help you protect sensitive data while leveraging the power of AI.