Top law firms charge more than $2,000 per hour; court documents were exposed for “AI hallucinations and a string of errors.”

Top U.S. law firm Sullivan & Cromwell (Sullivan & Cromwell) has recently publicly apologized to a federal judge. The reason is that the bankruptcy-court filings it submitted were full of incorrect information generated by AI, including fake case names, fabricated citations, and non-existent statutes—loopholes that were even exposed by outside counsel. Ironically, the firm’s partners charge $2,000 per hour, yet they failed to implement even basic review and proofreading.

Top law firm screws up! Exposed for using AI to write documents riddled with errors

The incident took place in a bankruptcy case at the U.S. Manhattan Bankruptcy Court involving the Cambodian royal family group (Prince Group). Sullivan & Cromwell appeared in court as counsel for the liquidator appointed by the authorities of the British Virgin Islands, but many AI-generated errors appeared in the court filings it submitted—amounting to more than thirty instances.

These errors were not even discovered internally by the firm; they were revealed in a public filing by the opposing law firm Boies Schiller Flexner in the same case. The types of errors included citing obviously fake case names that do not exist at all, fabricating wording that was never said or written, and even completely fabricating portions of the U.S. Bankruptcy Code.

In a letter dated April 18 to Judge Martin Glenn, Andrew Dietderich, head of global restructuring at Sullivan & Cromwell, admitted that some of the errors were AI hallucinations (hallucinations).

Internal review is basically a formality—law firm partners charge $2,000 per hour?

In the letter, Dietderich acknowledged that the firm has “comprehensive policies and training requirements” for the use of AI tools. Before lawyers are granted permission to use AI tools, they must also complete training courses, with an explicit requirement to “not believe anything and verify everything personally.” However, those policies were not implemented when preparing the document in question, and the secondary review process responsible for oversight also failed to catch any of the errors.

Given the partners’ hourly billing of more than $2,000, the matter has sparked widespread discussion in legal circles at home and abroad. In the letter, the firm said that after it discovered the errors, it conducted a comprehensive review of all other documents in the case, confirmed that AI hallucinations only appeared in that particular filing, and then subsequently submitted a corrected version.

AI hallucinations hit the legal world—lawyers’ ethical responsibilities once again under scrutiny

This incident is not the first time the legal industry has made headlines due to AI mishaps. In 2023, two lawyers in Manhattan, New York, were fined $5,000 by a federal judge for submitting to the court a legal brief full of fabricated cases generated by ChatGPT. In recent years, there have been dozens of cases where judges sanctioned lawyers for using AI to conduct legal research and draft documents without sufficiently verifying the content.

The American Bar Association (ABA) has already clearly required lawyers to remain cautious when using AI models, and lawyers also have an ethical duty to ensure the accuracy of all documents filed with the court. The law currently does not prohibit lawyers from using AI, but the duty to verify afterward still rests with the individual lawyer.

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Sullivan & Cromwell was founded more than a century ago and is one of the oldest and most prestigious law firms in U.S. history, with more than 900 lawyers. It is known worldwide for M&A, corporate governance litigation, and private equity business. Recently, the firm has continued to draw attention because it has represented U.S. President Trump in multiple appeal cases.

This AI “gotcha” incident, without a doubt, has added a crack that is difficult to ignore to the brand of this elite law firm, and has once again sounded a warning bell for the entire legal industry.

The article Top law firm charges over two thousand dollars per hour—the court filing exposed as “AI hallucinations, errors piling up” first appeared on Lian News ABMedia.