Lawyers have been using AI to do their homework. The courts are now grading that homework, and the results are not pretty.

A new study tracking AI-related legal misconduct found that Damien Charlotin’s global database logged 1,667 legal matters tied to AI hallucinations by mid-2026. That is up from roughly 230 cases documented just a year earlier. In plain terms: the problem nearly septupled in twelve months.

AI hallucinations, for the uninitiated, are not dramatic robot breakdowns. They are confident, fluent, completely fabricated outputs. A legal AI tool asked to find supporting case law might invent a citation that sounds real, formats correctly, and cites a judge who absolutely never wrote those words. Attorneys who submit that research without verifying it are the ones who end up in front of a very unamused judge.

The errors are not edge cases

The assumption that hallucinations are rare flukes does not survive contact with the benchmarks. Lexis+ AI and Thomson Reuters AI tools, two of the most prominent names in legal research technology, produced incorrect information more than 17% of the time in documented assessments. Some systems crossed the 34% error threshold in certain benchmarks.

Real consequences for real lawyers

On June 9, 2026, a US District Judge disqualified two attorneys for two years after they submitted AI-generated legal research containing hallucinations.

Then there is the Sullivan and Cromwell situation. In April 2026, one of the most prestigious law firms in the world admitted to a court that a bankruptcy filing contained AI-generated fake citations.

A February 2026 report from the National Center for State Courts made the institutional concern explicit, flagging hallucinations as a growing problem for both courts and practitioners.

The legal profession has seen technology scares before. E-discovery software, predictive coding, online research databases, each arrived with warnings about reliability and each eventually settled into standard practice. The difference with generative AI is the nature of the failure mode. A broken e-discovery filter might miss documents. A hallucinating AI invents documents that never existed and presents them with full confidence. One is an omission. The other is fabrication.

What this means for legal tech investors and law firms

The legal tech market built significant momentum around AI research tools over the past few years. A tool that produces wrong answers 17% to 34% of the time is not a productivity tool. It is a liability generator with a good interface.