🔎 CPS phantom case · 🧾 Bill time, not savings · 💰 A&O's $1.1bn

A prosecutor’s written decision in England cited the same nonexistent case three times, and the High Court decided it didn’t change the outcome. Meanwhile New York’s bar says you bill the hours you actually spent, not the ones AI saved, and A&O Shearman’s $1.1bn AI pledge turns out to be mostly its practices’ time. Check your cites, then your invoices — in that order.

🔎 How phantom law still gets in

A prosecutor’s internet research, a corrected draft that never got filed, and a retest of the studies your AI policy still quotes. The back doors are mundane, which is the problem.

🔎 A CPS decision to keep prosecuting a child cited a case that doesn’t exist

Three times, a senior Crown prosecutor’s written record of the decision to keep prosecuting a child leaned on “R v J [2024] EWCA Crim 3529”, a case that does not exist; she later said she meant a real 2009 House of Lords ruling. On 29 October a two-judge Divisional Court of the High Court in England called her explanation “unsatisfactory” but held it made no difference to the outcome, and dismissed the judicial review. The judgment never mentions AI: the Guardian (3 Nov) understands the citation came from an AI summary in an internet search, and the CPS says only that it came from “legal research using the internet”. Its own lesson travels well: cite case law from trusted legal sources, not search results.

Source: The Guardian

📄 Counsel says she fixed the cites in Westlaw — then filed the old draft

On counsel’s account, nobody skipped the cite-check. According to her declaration, defence counsel in Farhat v. Cutera (N.D. Cal.) drafted a motion to dismiss with Legora, checked the authorities in Westlaw, caught the errors and sent a corrected draft to her assistant — then an earlier, uncorrected version was converted to PDF and filed. Magistrate Judge Hixson discharged his show-cause order on 28 October with no sanctions, but admonished counsel, citing Rule 11(b), and refused to consider the replacement citations, as Michael Berman’s 3 November EDRM post points out. The tool details are counsel’s account, not a finding about Legora; the gap she describes is version control plus a final-PDF review that missed the swap.

Source: EDRM

🧪 50 LLM findings retested: fake references fade, legal hallucinations mostly hang on

Still quoting a 2023 study in your AI policy? Stanford’s Owen Queen and James Zou re-ran 50 widely cited LLM findings on 20 models released up to September 2026: 44% have expired and another 34% weakened. Fabricated references, 55% on GPT-3.5 in the original literature-review test, fell to about 1% for Claude Sonnet 5.5 and zero for GPT-6.1 Sol, yet Qwen3.7-Flash still invented 69%. The one legal claim, a legal-hallucination finding, only weakened, keeping nearly three-quarters of its original effect, and across topics models still answer when they should abstain. It’s a web report, not a journal paper — and a nudge to test the model you actually use.

Source: Zou Group, Stanford University

💸 Who pays for the AI hours?

A federal appeals court wants proof before AI cuts a fee, New York’s bar says bill only the time actually spent, Victorian lawyers report some fees falling, and A&O Shearman counts its AI pledge mostly in practice time.

🧮 Tenth Circuit: ‘they used AI’ isn’t enough to cut a $114,663 fee award

The losing side argued that defence counsel should have billed fewer hours because they relied on AI and online research tools. On 30 October a unanimous Tenth Circuit panel affirmed the $114,663.11 award under Colorado’s fee-shifting statute anyway: the challengers “identify no evidence that counsel’s use of AI resulted in excessive billing.” Judge McHugh accepted that AI may reduce the hours a case needs, but noted that ethics rules still require counsel to verify what they cite. It is a failure of proof, not a licence to bill AI-assisted time freely — so anyone challenging a fee bill should bring specific entries, not a hunch.

Source: U.S. Court of Appeals for the Tenth Circuit

🧾 New York bar guidelines: bill the time spent, not the time AI saved

New York’s state bar has written down what many billing partners hoped nobody would ask. Guidelines adopted by the NYSBA House of Delegates on 31 October say hourly billers may charge only for time actually spent, including prompting and verifying output, not for time the work would have taken without AI or for learning a tool; general tool costs are ordinarily overhead. Flat fees need not drop just because AI made the work faster, though they must stay reasonable. The 96 pages also cover client consent before AI records a call and keeping ethical screens intact inside AI systems. It’s advisory guidance interpreting New York’s rules, not a court rule or binding ethics opinion.

Source: New York State Bar Association

📊 Victorian lawyers: 55% use AI, 26% of fee-charging users report lower fees

Here’s rare regulator data on whether AI savings reach the bill. The Victorian Legal Services Board + Commissioner’s 2026 census (2,221 lawyers, a 7.2% response rate, weighted) found 55% using AI, up from 37% in 2025. Among AI users in fee-charging practice, 26% said AI had reduced clients’ fees (34% of those mainly serving business clients), 18% had taken on previously uneconomic work and 7% had moved to fixed or capped fees. Clients’ own AI use cuts the other way: 46% of client-facing lawyers said it added time and effort, 19% said it saved some, and community legal centres fared worst. All self-reported, and Victoria, Australia, only.

Source: Victorian Legal Services Board + Commissioner

🏗️ A&O Shearman’s $1.1bn AI commitment comes mostly in practice time

Read past the $1.1bn. A&O Shearman’s own release says most of its five-year AI commitment “will come from each practice investing at least 3% of its time” building specialist tools, without saying how that time is valued. The supporting numbers are firm-reported too: 96% of partners and 93% of lawyers used its AI tools in September, ContractMatrix client uptake rose ninefold in a year, and in one client’s blind evaluation ContractMatrix scored 8.5% higher than the next rival, with no method published. The phrase to watch is “novel pricing structures”, which the firm mentions and leaves undescribed.

Source: A&O Shearman

⚖️ Courts brace for AI on both sides of the bench

Ontario drafts rules for AI evidence, judicial review claims surge in England and Wales with AI suspected but unproven, and US states can’t agree whether judges may use it at all.

⚖️ Ontario’s proposed rules: explain your AI evidence or risk exclusion

Ontario’s Civil Rules Committee has sent the Attorney General a “seriously amended” set of proposed rules on AI-generated evidence, Law Times reported on 3 November; revised text is expected this month, and none of it is law yet. As committee chair Justice Peter Lauwers describes them, a court could make the side offering acknowledged AI evidence identify the system, training data, inputs and prompts, while material found to be undisclosed AI content, such as a deepfake, would be presumed inadmissible. Prompts stay discretionary because of privilege — but withhold them and the evidence may not get in. Lauwers has already told judges to use the draft as a practical guide, so Ontario litigators shouldn’t wait for the final text.

Source: Law Times

📈 Judicial review claims surge in England and Wales; the AI link is unproven

Are chatbots flooding England and Wales’s Administrative Court? The claims are real: Ministry of Justice figures show 2,630 judicial review applications in the first half of 2026 against 3,647 in all of 2025, and the Lady Chief Justice’s 5 November report puts April–June up 42% on a year earlier. The AI link is observed, not measured: that report notes more litigants in person “using AI to construct their claims”, and in June the court said it “suspects” as much. Writing on the UK Constitutional Law Association blog on 30 October, Sam Guy and Joe Tomlinson find permission grant rates and “totally without merit” certifications broadly in line with earlier years, so a wave of hopeless AI claims isn’t visible in the data yet.

Source: UK Constitutional Law Association

🏛️ May your judge use AI? Depends on the state, as Clio courts the bench

Clio wants to sell AI to judges — it has hired Pablo Arredondo and Bridget McCormack and bought Learned Hand — but Bob Ambrogi’s 50-state survey for LawSites shows the courthouse door is only partly open. Massachusetts bars judges and court staff from using generative AI for legal research, writing or other legal work, while New York allows approved tools and a September ethics opinion lets judges summarise transcripts with an approved private AI product, provided they review the output. The one point the policies agree on: judges cannot delegate the decision to AI. Ambrogi built the table, current to 30 October, with ChatGPT and Claude plus his own research, so check the linked primary before relying on any other state’s entry.

Source: LawSites / LawNext

🛡️ Guard the context, verify the caller

When the DMS feeds every AI tool, the risk is what comes back in; and US prosecutors allege the voice on the deal call, and the lawyer it hands you to, can both be fake.

🗂️ NetDocuments wants the DMS to feed every AI tool. Govern the save-back.

At NetDocuments’ Inspire conference (19–21 October) the pitch was a DMS at the centre of every AI tool, with Harvey, Legora and others connecting over MCP and, increasingly, saving AI-written documents back into matters. Legal IT Insider’s Neil Cameron, whose trip NetDocuments paid for (he discloses it), names the catch “semantic drift”: AI tags steer retrieval and AI summaries become sources for the next AI, so one unverified assertion can look like three independent sources. NetDocuments’ own benchmark, with AI-written questions and an AI grader, reports 48% lower cost per correct answer, but quality moved only from 73.9 to 75.4. His most usable step: require approval for every save-back and label AI work by grade.

Source: Legal IT Insider

🎭 US prosecutors allege AI-mimicked CEOs and fake law-firm lawyers took $129M

The caller sounds like your CEO and hands you to a lawyer at a big international firm; according to an indictment unsealed in Manhattan on 5 November, neither is real. Prosecutors allege three defendants and co-conspirators used AI to mimic executives’ voices and sometimes images, then posed as real lawyers from large firms’ European offices (one allegedly working from a handwritten “Lawyer Call” script) to direct wires totalling at least $129m. The release says “super intelligence”; the indictment says AI. These are allegations, the defendants are presumed innocent and extraditions are pending, but agreeing call-back checks with clients costs little.

Source: U.S. Attorney’s Office (S.D.N.Y.)

💬 Community Spotlight

✍️ AI brief drafts arrive fast and hide their mistakes well

A junior litigator says partners and seniors at their firm now start briefs from complete AI drafts, and the craft they joined for is fading. The useful replies show where the line sits: one 15-year litigator stocks a Claude project with the motion’s key documents and an outline, gets a statement of facts in about ten minutes and lets it fill paragraph numbers — but says the lawyer still writes the intro, does the research and checks every cite.

The sharpest warning comes from a fourth-year supervisor: juniors who lean on AI don’t check it, its errors are devastating but well hidden, and feedback is “almost useless”. Another associate gets the partner’s AI draft the day after the assignment — same hours, less satisfaction. Dissent is real: a 12-year litigator finds a blank page faster and better, and client-side commenters split between accepting the cheaper draft and not wanting outside counsel using today’s tools. It’s all anecdote; no one reports a measured outcome.

Key Takeaways:

• Keep the thinking human: one litigator lets Claude draft the statement of facts and declarations, but leaves the intro, research, outline and every cite and fact check to the lawyer.
• Go granular: the same litigator splits a brief into about ten discrete steps and says Claude handles roughly half; finer steps give better output but take longer.
• Supervision is the new pinch point: a fourth-year says juniors who skip checking bury “devastating” AI errors that are harder to spot than old-fashioned junior mistakes.
• Not everyone is converted: a 12-year litigator found AI starting drafts slower and worse than a blank page, and another spent two hours fixing an AI blog post that skipped half its sources.
• Run the numbers: in one hypothetical a $50k brief gets a good result 90% of the time and a $5k AI draft 88%; another commenter notes the extra $45k pays once more than $2.25m is at stake, which they say their clients typically exceed.

Source: r/biglaw

💬 More from the community

🔁 Same prompt, same files, four failures in five

One firm says Ask iManage failed or refused on four of five identical runs, mostly on 250+ page documents, while Lexis Protégé, ChatGPT and paid Copilot stayed consistent; iManage’s fixes, including a higher token limit, aren’t live yet. Replies, some from vendors, say log every run, separate timeouts from refusals and keep failing files for a retest. Another firm mostly gave up; the poster says people still try it because it sits in the DMS.

Source: r/legaltech

🧪 Test your anonymiser on fake contracts first

Is scrubbing client data before Claude or ChatGPT even necessary? Some commenters call enterprise no-training, zero-retention terms the baseline; others distrust those plans and note many users still sit on consumer tiers. Builders, many selling tools, warn automatic redaction misses indirect identifiers and names in signature blocks, so seed fake contracts, inspect what actually reaches the cloud and review before anything uploads.

Source: r/legaltech

📒 Log a week of admin minutes before buying AI seats

An estate-planning firm whose owner wants Claude running tasks gets a sequence, not a tool: one consultant says log a week of non-billable minutes, rank by minutes times frequency and fix the three or four handoffs that eat the week. A fellow estate planner adds two rules: solve a pain point and keep it easy to hand back to a person. Sceptics say AI phones put clients off and probate drafting should stay deterministic, conceding only note-taking.

Source: r/LawFirm