Law Firm’s ChatGPT Warning
Jacqui Coombe, LawFuel contributing writer
The AI law firm implications were highlighted in a recent legal saga where a New York law firm found itself entangled in a controversy when it attempted to justify its legal fees using OpenAI’s ChatGPT.
Cuddy Law found itself in the law firm AI dispute despite securing a victory in a lawsuit against the New York City Department of Education (DOE), the law firm faced scrutiny for its unconventional use of artificial intelligence in the billing process.
The case revolved around Cuddy Law’s representation of a plaintiff who sued the DOE for failing to provide the plaintiff’s child with a free appropriate public education.
The child, diagnosed with attention deficit hyperactivity disorder (ADHD), language disorder, developmental coordination disorder, and acute stress disorder, prompted the legal action.
The AI Billing Error
The firm successfully argued the case, but trouble arose when it sought to substantiate its billing rates using ChatGPT-4, an AI tool known for generating occasionally inaccurate information.
Despite ChatGPT’s reputation, Cuddy Law proceeded to employ it as a supporting element for their fees in a trial they had won.
However, the presiding judge, Paul Engelmayer, not only rejected a significant portion of the requested fees but also admonished the law firm for its questionable use of ChatGPT. The judge, in his rebuke, emphasized the inherent dangers of relying on ChatGPT, pointing out the AI’s incapacity to distinguish between authentic and fabricated case citations.
Judge Engelmayer referenced recent cases from the US Court of Appeals Second Circuit where legal practitioners faced reprimand for using ChatGPT to create counterfeit judicial opinions and authorities.
Even notable figures like Michael Cohen, (left) former lawyer to Donald Trump, have faced allegations of using AI-generated spurious case law, intensifying concerns about the influence of generative AI within the legal realm.
Cuddy Law defended its utilization of ChatGPT, contending that it served as a cross-check to align their fees with industry standards. The argument rested on the premise that the losing side typically bears the legal fees, making their request reasonable. Benjamin Kopp, a lawyer at Cuddy Law, asserted that their use of AI was distinct from fabricating court documents, characterizing it as a supplementary tool.
However, Judge Engelmayer remained unconvinced, raising questions about the transparency of Cuddy Law’s fee schedule.
AI’s ‘Synthetic Data’
The judge particularly highlighted the law firm’s failure to disclose the inputs used in conjunction with ChatGPT and whether any data utilized was synthetic. The lack of clarity regarding the synthetic nature of the data employed raised broader concerns about accountability and accuracy in legal proceedings when relying on AI-generated information.
In his 34-page ruling, Judge Engelmayer not only deemed the law firm’s requested fee of $113,484.62 as unacceptable but also urged Cuddy Law to distance itself from using the AI tool in future fee applications. The firm ultimately received a substantial reduction in awarded fees, settling at $53,050.13.
AI Law Firm Cautionary Tale
This case serves as a stark cautionary tale for legal professionals contemplating the integration of technology into their practice. Law firms are continuing to accelerate their use of artificial intelligence and other tools into their law practices.
While AI tools like ChatGPT offer potential benefits in legal research and analysis, so long as the AI risks are managed properly, the risks of relying on them without proper verification are evident. Judge Engelmayer’s firm stance underscores the imperative need for transparency, diligence, and responsible use of AI in the legal field.
As the legal community reflects on this specific case, broader questions arise about how the legal landscape will adapt to the evolving role of artificial intelligence.
The intersection of law and technology continues to present challenges, both for private law firms and also for in-house counsel facing AI risk issues, demanding a careful balance between leveraging innovation and upholding the integrity of legal processes. Legal professionals are urged to tread cautiously, learning from the cautionary tale of Cuddy Law’s encounter with the complexities of AI in the courtroom.
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