Premier Wall Street law firm apologizes for AI ‘hallucinations’

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Sullivan & Cromwell, a premier Wall Street law firm, apologized to a federal judge for submitting a court filing with inaccurate citations and other errors generated by artificial intelligence.

In a letter dated April 18, Andrew Dietderich, co-head of the firm’s global restructuring group, said the errors included AI “hallucinations” – instances in which AI makes up case citations, misquotes the law or generates non-existent legal sources.

The mistakes were caught by law firm Boies Schiller Flexner, Dietderich said in the letter to Martin Glenn, chief judge of the U.S. Bankruptcy Court in Manhattan.

“I apologize on behalf of our entire team. I also called Boies Schiller Flexner LLP on Friday to thank them for bringing this matter to our attention and to apologize directly to them as well,” Dietderich wrote.

Boies Schiller Flexner is also involved in the case.

The letter did not say what AI program was used to help produce the court filing. Dietderich and a representative of the firm did not immediately respond to requests for comment.

AI policies not followed

The firm told the judge it maintains “comprehensive policies and training requirements governing the use of AI tools in legal work” that are designed to minimize errors. The letter said those AI policies were not followed and that a secondary review process also “did not identify the inaccurate citations generated by AI.” It later filed a corrected version.

U.S. judges have sanctioned lawyers in dozens of cases after attorneys used AI for legal research and drafting without fully vetting the results. Lawyers are not prohibited from using AI but are ethically bound to ensure the accuracy of court submissions.

New York-based Sullivan & Cromwell, with more than 900 lawyers, has a reputation as one of the country’s top corporate firms, known for its mergers and acquisitions work, corporate governance litigation and private equity matters.

In the New York case, the firm represents foreign representatives involved in the wind-down of Prince Global Holdings Limited, a Cambodian conglomerate whose founder and chairman Chen Zhi was charged in Brooklyn federal court for allegedly directing forced labor compounds in Cambodia and a massive investment fraud.

A representative from Prince Group could not be immediately reached for comment. Prince Group in a statement last year denied that Zhi had committed wrongdoing, and called the allegations baseless.

Boies Schiller represents a group of objecting debtors in the case. A Boies Schiller attorney in the proceedings did not immediately respond to a request for comment.