Hallucinated Law: Big Firms Face Sanctions, Insurance Shocks, and New Ethics Rules as AI Misfires Mount

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A Contagion Across the Am Law Landscape

Butler Snow’s embarrassment is only the latest entry in a growing docket of AI‑induced blunders:

  • Latham & Watkins– Counsel representing AI‑darling Anthropic cited a fabricated Harvard Law Review note when attacking a copyright complaint, prompting an emergency correction before a sanctions hearing in the Northern District of California.
  • K&L Gates and Ellis George Cipollone O’Brien– A federal magistrate fined the firms $31,100 after their joint brief defending ex‑Los Angeles D.A. Jackie Lacey included six hallucinated cases. com
  • Morgan & Morgan– America’s largest plaintiffs’ firm was rapped by a Florida judge for eight fake citations in a wage‑and‑hour motion, with the court warning that “blind faith in ChatGPT does not equal reasonable diligence.” ABA Journal
  • State‑Funded Alabama Prison Defense– Taxpayers have spent $5.6 million on outside counsel whose AI‑drafted filings “undermine the integrity of these proceedings,” according to the court record.

While the 2023 Mata v. Avianca fiasco put hallucinations on the map, the problem’s migration into multi‑office power firms signals a systemic risk rather than isolated sloppiness. Goldberg Segalla