Feb 18 (Reuters) - U.S. personal injury law firm Morgan

& Morgan sent an urgent email this month to its more than 1,000

lawyers: Artificial intelligence can invent fake case law, and

using made-up information in a court filing could get you fired.

A federal judge in Wyoming had just threatened to sanction

two lawyers at the firm who included fictitious case citations

in a lawsuit against Walmart ( WMT ). One of the lawyers

admitted in court filings last week that he used an AI program

that "hallucinated" the cases and apologized for what he called

an inadvertent mistake.

AI's penchant for generating legal fiction in case filings

has led courts around the country to question or discipline

lawyers in at least seven cases over the last two years, and

created a new high-tech headache for litigants and judges,

Reuters found.

The Walmart ( WMT ) case stands out because it involves a

well-known law firm and a big corporate defendant. But examples

like it have cropped up in all kinds of lawsuits since chatbots

like ChatGPT ushered in the AI era, highlighting a new

litigation risk.

A Morgan & Morgan spokesperson did not respond to a request

for comment. Walmart ( WMT ) declined to comment. The judge has not yet

ruled whether to discipline the lawyers in the Walmart ( WMT ) case,

which involved an allegedly defective hoverboard toy.

Advances in generative AI are helping reduce the time

lawyers need to research and draft legal briefs, leading many

law firms to contract with AI vendors or build their own AI

tools. Sixty-three percent of lawyers surveyed by Reuters'

parent company Thomson Reuters last year said they have used AI

for work, and 12% said they use it regularly.

Generative AI, however, is known to confidently make up

facts, and lawyers who use it must take caution, legal experts

said. AI sometimes produces false information, known as

"hallucinations" in the industry, because the models generate

responses based on statistical patterns learned from large

datasets rather than by verifying facts in those datasets.

Attorney ethics rules require lawyers to vet and stand

by their court filings or risk being disciplined. The American

Bar Association told its 400,000 members last year that those

obligations extend to "even an unintentional misstatement"

produced through AI.

The consequences have not changed just because legal

research tools have evolved, said Andrew Perlman, dean of

Suffolk University's law school and an advocate of using AI to

enhance legal work.

"When lawyers are caught using ChatGPT or any generative

AI tool to create citations without checking them, that's

incompetence, just pure and simple," Perlman said.

'LACK OF AI LITERACY'

In one of the earliest court rebukes over attorneys' use of

AI, a federal judge in Manhattan in June 2023 fined two New York

lawyers $5,000 for citing cases that were invented by AI in a

personal injury case against an airline.

A different New York federal judge last year considered

imposing sanctions in a case involving Michael Cohen, the former

lawyer and fixer for Donald Trump, who said he mistakenly gave

his own attorney fake case citations that the attorney submitted

in Cohen's criminal tax and campaign finance case.

Cohen, who used Google's AI chatbot Bard, and his lawyer

were not sanctioned, but the judge called the episode

"embarrassing."

In November, a Texas federal judge ordered a lawyer who

cited nonexistent cases and quotations in a wrongful termination

lawsuit to pay a $2,000 penalty and attend a course about

generative AI in the legal field.

A federal judge in Minnesota last month said a

misinformation expert had destroyed his credibility with the

court after he admitted to unintentionally citing fake,

AI-generated citations in a case involving a "deepfake" parody

of Vice President Kamala Harris.

Harry Surden, a law professor at the University of

Colorado's law school who studies AI and the law, said he

recommends lawyers spend time learning "the strengths and

weaknesses of the tools." He said the mounting examples show a

"lack of AI literacy" in the profession, but the technology

itself is not the problem.

"Lawyers have always made mistakes in their filings before

AI," he said. "This is not new."