Legal and Regulatory intelligence for you

ILTACON: Litera, Oddr, TRĒ AI Announcements Reshape Law Firm Business

ILTACON featured a surge of AI product announcements, focusing on agentic AI and the Model Context Protocol. Litera introduced Firm AI Search and growth intelligence, enabling natural language access to firm knowledge and proactive business development signals.

8 Sept

2nd Circuit: Lawyer Admits AI Brief Errors, Must Revise

Attorney Elliot Shields admitted to the 2nd U.S. Circuit Court of Appeals that he used artificial intelligence to draft his client's brief. The AI use led to errors, specifically citing paraphrased content as direct quotes, which Shields attributed to rushing and transposing notes.

8 Sept

US Lawyer: AI Hallucination Disciplinary Defense Redefines Ethics

In an unspecified jurisdiction, a lawyer reportedly cited "AI hallucinations" as a defense during a disciplinary hearing, according to Legal Cheek. This development signals a critical emerging challenge for legal ethics and professional responsibility, as artificial intelligence tools become more integrated into legal practice. The concept of "AI hallucinations" – where AI generates plausible but false information – directly impacts a lawyer's duty of candor to the tribunal, competence, and diligence. For practitioners, it underscores the imperative to understand the limitations and potential pitfalls of AI tools, ensuring that any AI-generated content is rigorously verified before being presented in court or relied upon in legal advice. Disciplinary bodies will increasingly grapple with establishing standards for AI use and determining culpability when AI errors lead to professional misconduct, setting precedents for future cases. The legal context for this issue primarily revolves around rules of professional conduct, such as those promulgated by state bar associations, which typically mirror the ABA Model Rules of Professional Conduct. Key rules implicated include Rule 1.1 (Competence), Rule 1.3 (Diligence), Rule 3.3 (Candor Toward the Tribunal), and Rule 8.4 (Misconduct). These rules require lawyers to provide competent representation, act with reasonable diligence, not knowingly make false statements of fact or law to a tribunal, and not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. The use of AI tools, particularly generative AI, introduces new complexities in satisfying these long-standing ethical obligations, necessitating careful consideration of how "reasonable diligence" and "knowing falsehoods" apply in an AI-assisted environment. The key parties involved in this specific instance are the unnamed lawyer facing disciplinary action and the disciplinary body (e.g., a state bar association or disciplinary committee) responsible for enforcing professional conduct rules. While not explicitly named, the AI tool provider is an indirect party whose technology is at the center of the defense. The outcome of this disciplinary hearing is not reported in the excerpt, but it will undoubtedly contribute to the evolving discourse on AI in legal practice. Attorneys must exercise extreme caution and skepticism when utilizing AI tools for legal research, drafting, or analysis. It is crucial to implement robust verification processes for all AI-generated content, cross-referencing with authoritative primary sources to prevent the introduction of "hallucinated" information into legal work. Firms should develop clear internal policies and comprehensive training programs on the ethical and responsible use of AI, emphasizing the lawyer's ultimate responsibility for the accuracy and veracity of all submissions. Failure to do so could lead to severe professional sanctions, including disbarment, as disciplinary bodies are likely to hold lawyers accountable for AI-induced errors that violate established ethical duties.

8 Sept

Second Circuit Cautions Lawyer AI Brief: Errors Lead to Refiling

Attorney Elliot Shields admitted to the Second Circuit that AI likely caused citation and quotation errors in his brief for an $82 million personal injury case. U.S. Circuit Judge Maria Araújo Kahn warned of AI's "perils," citing a Connecticut lawyer's suspension for similar issues, emphasizing the

4 Sept

DC Appeals Court: Blames Deutsche Bank AI Hallucinations, Strikes Brief

The DC Court of Appeals struck down a Deutsche Bank subsidiary's appellate brief due to AI-generated fake citations. Lawyer Loishirl Hall admitted Google's generative AI produced four nonexistent case citations in the brief.

4 Sept

Federal Judge Rejects xAI Minnesota AI Nudifying Ban

U.S. District Judge Donovan Frank on Friday denied xAI’s request for a preliminary injunction against Minnesota’s new legislation banning AI "nudification" technology. In a 14-page order, Judge Frank ruled that Elon Musk’s AI company failed to demonstrate it would suffer irreparable harm if the statute remained active. The judge also pointed out that xAI’s decision to wait until three days before the law’s effective date to file its motion undermined its claim for emergency relief. Minnesota’s legislation, described as the nation’s first of its kind, aims to combat the proliferation of nonconsensual AI-generated imagery, which the judge noted has resulted in a "flood of sexualized images" that can remain online indefinitely. While xAI maintains that its "Grok Imagine" platform prohibits users from generating such content through its terms of service, Minnesota officials contend these policies are insufficient to prevent illegal image generation. This ruling carries significant legal implications for the rapidly evolving landscape of AI regulation and content moderation. It signals judicial support for state legislative efforts to address the societal harms posed by emerging technologies, particularly concerning privacy and the prevention of digital abuse. For companies developing generative AI, it underscores the high bar for obtaining preliminary injunctive relief against state laws, especially when public interest concerns are substantial and the moving party has delayed seeking relief. The decision reinforces the principle that states possess broad police powers to protect their citizens, even in the face of novel technological challenges. The legal context for this decision involves the stringent standards for granting a preliminary injunction, which typically require the moving party to demonstrate a likelihood of success on the merits, irreparable harm, that the balance of equities favors them, and that an injunction is in the public interest. Judge Frank, a Bill Clinton appointee, found xAI lacking on the irreparable harm prong and implicitly on the balance of equities, given the state's compelling interest in preventing nonconsensual imagery. The case is situated within the U.S. federal court system, with the U.S. District Court having jurisdiction over challenges to state laws on federal grounds. Practitioners advising technology companies, particularly those in the AI sector, should closely monitor the ongoing legal challenges to such state-level regulations. This case highlights the necessity for proactive legal compliance strategies, robust content moderation systems that go beyond mere terms of service, and timely engagement with legislative and judicial processes. Attorneys should counsel clients on the potential for a patchwork of state laws regulating AI content and the importance of demonstrating genuine efforts to mitigate harm to avoid legal challenges and adverse rulings. The outcome of the broader legal challenge to Minnesota's law, beyond this preliminary injunction, remains to be seen and will be crucial for setting precedents in AI governance.

4 Sept

Litera Trailblazers ILTACON: Avaneesh Marwaha on AI Law Firm Strategy

Litera CEO Avaneesh Marwaha challenged legal technologists at ILTACON to compete with firms like Troutman Pepper and FBT Gibbons, who showcased advanced AI adoption. A Litera survey revealed 95% of firms believe their AI bets are made, but Marwaha cautioned against complacency, emphasizing continuou

4 Sept