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Freedom251 › Blog › Artificial Intelligence

What Lawyers Need to Know About AI Hallucinations, Confidentiality, and Professional Responsibility

By Freedom251 Team · · 9 min read

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Lawyers can use generative AI in legal work, but they remain responsible for the work product, professional judgment, and information they share. The practical rule is to treat AI output as a draft or research lead—not as verified law or advice—and to check confidentiality, accuracy, and applicable jurisdictional requirements before relying on or communicating it. ABA Formal Opinion 512 explains how existing Model Rules apply to generative AI; it is guidance, not a binding rule in every state.

Can lawyers use generative AI?

Yes, but using a tool does not transfer a lawyer’s professional responsibilities to the tool. Generative AI can help draft, summarize, brainstorm, or identify research leads. A lawyer must still apply independent judgment, protect client information, and review work before it is used in advice, a filing, or another representation to a client or third party.

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The American Bar Association’s Formal Opinion 512, issued July 29, 2024, addresses generative AI under the Model Rules as amended through August 2023. It says that uncritical reliance can lead to inaccurate advice or misleading representations, and that insufficient independent verification may violate the duty of competence. The amount of review depends on the tool and the task; the opinion does not prescribe one identical checklist for every use.

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That distinction matters because the opinion interprets the ABA Model Rules; it does not itself replace the rules or ethics opinions that govern a lawyer in a particular jurisdiction. Local professional-conduct rules, court orders, client agreements, and matter-specific obligations may affect what is permitted. Identify the applicable jurisdiction and governing requirements before treating general ethics guidance as a categorical answer.

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What counts as an AI hallucination in legal work?

A hallucination is not limited to a made-up case name. An AI system may invent an authority, attribute a quotation to a real decision that never contains it, misstate what a real case holds, supply a false parenthetical or pin cite, or give an unsupported factual or legal answer. A citation can look plausible and still be wrong. Conversely, a response that omits useful information may be incomplete without being a hallucination; the distinction matters when interpreting measured error rates.

Two 2024 studies illustrate the risk, but their percentages describe different tests—not a single scorecard for products or a prediction of how a current system will perform in a particular matter.

Study and tested task Reported result How to interpret it
Stanford RegLab and coauthors evaluated the tested LexisNexis and Thomson Reuters legal research tools on their query set. The tools hallucinated between 17% and 33% of the time. The study also distinguished hallucinations from incomplete responses. Its result applies to the tested systems and query set, not every task, product, or later version. Read the 2024 paper.
Yale Law School and Stanford coauthors tested models on specific, verifiable questions about randomly selected federal court cases. The paper reports hallucination rates of 58% for ChatGPT-4 and 88% for Llama 2 on that task. This was a different task from the legal research-tool evaluation above, so the percentages should not be compared as if they came from one benchmark. Read the 2024 paper.

These studies establish that errors persisted in the systems and tasks they tested; they do not establish a universal or current error rate for all legal AI. A citation link, retrieval feature, legal-domain focus, or enterprise setting should not be treated as proof that an answer is accurate. Reliability still has to be assessed against the underlying source and the work the lawyer intends to do.

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How should a lawyer verify AI-generated legal citations?

Use generated citations as leads. Verify each authority in a primary legal source and confirm that it supports the proposition for which it is offered. A quick check of whether a citation string resolves is not enough: the linked material could be the wrong decision, the wrong passage, or an authority that does not say what the output claims.

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The following workflow is an operational way to apply the duty of review described in ABA Opinion 512 and Florida guidance. It is not a verbatim checklist mandated in identical form in every jurisdiction.

  1. Separate claims from sources. Mark each legal proposition, factual assertion, quotation, and citation in the output that could affect advice or a filing. Do not assume that a citation attached to one sentence supports every claim in the paragraph.
  2. Open the actual authority. Find the opinion or other primary source independently. Confirm that the case exists and that the court, date, and procedural context match the citation.
  3. Read the relevant text in context. Check the cited passage and surrounding discussion against the proposition. Confirm quotations word for word, and verify pin cites rather than relying on a generated quotation or parenthetical.
  4. Check status and fit. Determine whether the authority remains usable for the intended purpose and whether its posture, jurisdiction, and facts make it relevant. A real decision can still be mischaracterized or inapplicable.
  5. Verify material facts separately. For client advice, confirm factual assertions against dependable matter records or other appropriate sources. AI-generated detail is not evidence merely because it is specific or confidently phrased.
  6. Review the final work product. A responsible lawyer should examine the client-facing or court-facing version after edits, including any citations and claims introduced during drafting. Responsibility remains with the lawyer who uses or submits the work.

The depth of checking should match the stakes and the task. A tentative outline and a court filing do not carry the same risk, but neither should be treated as self-authenticating. Where a claim cannot be verified, remove it, qualify it appropriately, or investigate further rather than presenting it as established.

Can I put client information into an AI tool?

There is no reliable shortcut based on a product label such as “private” or “enterprise.” The relevant question is how the specific system is configured and handles the information in the specific use. ABA Opinion 512 identifies disclosure or unauthorized access to client information as confidentiality risks. The Florida Bar’s Opinion 24-1, issued January 19, 2024, specifically points lawyers to retention, sharing, and self-learning policies. It notes that an in-house setup may mitigate concerns where no third-party disclosure occurs; that does not mean every in-house system automatically resolves every issue.

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Before entering identifiable client information, establish what happens to prompts and uploaded files, who can access them, whether they are retained or used to improve models, what deletion controls apply, and whether the firm has approved the service. Consider the data flow and configuration, not just the vendor’s marketing description. These are practical investigation questions drawn from the guidance, not a claim that every jurisdiction requires one particular setting.

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  • Minimize what is entered. If a task can be done with a hypothetical or de-identified facts, consider using that approach rather than including client identifiers or unnecessary matter details.
  • Check access and retention. Determine who can view inputs and outputs and how long they remain available, including in shared workspaces or logs.
  • Understand model-improvement practices. Find out whether submitted material may be used for training or other service improvement and what controls or settings apply.
  • Review firm and client constraints. Check applicable professional rules, firm policies, client expectations, and any agreement or order that governs the information.
  • Escalate unresolved questions. If the data handling cannot be established or the confidentiality implications remain unclear, do not submit sensitive information until the issue is resolved.

Consent and disclosure questions depend on the governing rule and facts. A lawyer should not assume that every use requires client consent, or that no use does. The system, information, purpose, client expectations, and jurisdiction all matter.

Do lawyers have to tell clients when they use AI?

ABA Opinion 512 does not create a universal requirement to disclose every AI use to every client. It discusses consultation when AI use affects a significant decision in the representation or when a client would reasonably want to know whether the lawyer is exercising independent judgment or deferring to AI. The New York City Bar’s Formal Opinion 2024-5 addresses generative AI in New York practice and includes consultation, supervision, candor, and reasonable fees among the issues lawyers should consider.

For a particular matter, assess what the client was told, what the engagement requires, how material the AI use is to a decision, and what local rules or other constraints apply. If the use changes a significant decision or substitutes AI for judgment the client reasonably expects the lawyer to exercise, consultation may be appropriate. Do not turn general guidance into a blanket consent rule without jurisdiction- and matter-specific support.

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Who is responsible for AI-assisted work inside a law firm?

The lawyer remains responsible for professional judgment and work product. Florida Opinion 24-1 analogizes relevant oversight to supervision of nonlawyer assistants and says lawyers remain responsible for AI-generated work product. Firm leaders can make that responsibility workable by setting procedures before a tool is used on client matters, rather than leaving each person to guess what is acceptable.

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A useful firm policy can specify approved tools and permitted uses; confidentiality checks before uploading information; the level of source verification expected for different tasks; who reviews client-facing and court-facing work; how uncertain or unsupported output is escalated; and how the firm records final review. The right controls depend on the tool and the matter. In evaluating options, compare practical characteristics rather than relying on labels:

Evaluation area Questions for the firm
Confidentiality and data handling What is retained, shared, accessible, or used to improve the model? What settings, deletion controls, and access restrictions are available?
Task performance and sources Does the tool provide sources that can be checked independently? How does it perform on the task the firm actually plans to use it for?
Human review burden Can a lawyer verify outputs efficiently against primary material, or does the tool make that harder?
Supervision and auditability Can the firm control access, define permitted use, and determine who reviewed the final work?
Jurisdiction and client constraints Do local rules, court orders, client terms, or matter-specific expectations limit the proposed use?

No single feature settles the ethics analysis. The goal is to match the system, task, safeguards, and review process to the risk, while preserving the lawyer’s ability to verify and take responsibility for the result.

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Can a lawyer be sanctioned for AI hallucinations?

Yes. A federal court example is Mata v. Avianca. In its June 22, 2023 sanctions order, the U.S. District Court for the Southern District of New York described a brief containing nonexistent decisions and fabricated quotations generated with ChatGPT. The court ordered $5,000 paid to the court and required corrective letters, with the sanctions order and related materials, to the client and judges whose names had been falsely used. The order also described the failure to investigate after the opposing party and the court questioned the cases. Read the order.

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Judge P. Kevin Castel wrote: “But existing rules impose a gatekeeping role on attorneys to ensure the accuracy of their filings.” The case demonstrates that submitting fabricated authorities and failing to respond appropriately to questions about them can have consequences. It is not a categorical ban on AI: the opinion says there is nothing inherently improper about using a reliable AI tool for assistance. Nor does one sanctions order predict the outcome of every error; consequences depend on the facts and applicable rules.

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If questionable material is discovered in a draft, advice, or filed document, stop relying on it until it is checked. Verify the source, determine what was communicated or submitted and to whom, and promptly address any required correction or disclosure under the governing rules and court procedures. Keep an accurate record of the review and response. Do not repeat or defend a doubtful citation merely because it appeared in an earlier AI-generated version.

How should firms handle billing for AI-assisted work?

Fees and costs still need to be reasonable. ABA Opinion 512 and Florida Opinion 24-1 both address fees in the context of AI use. A firm should not bill a client for time supposedly spent on work that automation saved as though that time was actually performed. It should also examine how any tool-related cost is charged and whether the engagement terms and applicable rules support the charge. The technology does not make a fee reasonable by itself.

Billing practices should be consistent with the work actually done and the client’s agreement. If automation changes the method or amount of work, assess the resulting charge under the applicable professional obligations rather than treating an AI output as a substitute for work that was billed but not performed.

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