According to Above the Law's Morning Docket citing NPR, penalties for AI hallucination-related errors are increasing, but lawyers continue to submit filings citing fake cases generated by AI tools. Separately, two Above the Law analyses frame AI hallucinations as a foreseeable engineering risk inherent to LLM systems — not a bug — and argue that the legal industry should apply lessons from auditing practices to mitigate this risk. Justice Sotomayor also advised law students to master AI, though commentators argued her guidance lacked sufficient structural warnings about these risks.

Impact · Firms face compounding professional liability exposure. Every filing that includes an AI-generated hallucination risks sanctions, malpractice claims, and reputational damage. The fact that penalties are rising while incidents persist suggests that informal guidance and ad hoc policies are insufficient. Firms without formal AI verification protocols and mandatory human review workflows are operating with material risk.

Action · Conduct an immediate audit of your firm's AI usage policies. Require mandatory secondary verification of all AI-generated case citations before filing. If your firm lacks a written AI governance policy with documented review procedures, draft and implement one this month — courts are clearly signaling zero tolerance.

WilmerHale is facing public scrutiny over a $35 million legal bill that reportedly cost approximately $162,000 per day, with the bill containing what observers describe as notable pay jumps and high logged hours, per Above the Law. The bill has drawn enough attention to become a standalone news story and a featured item in the publication's daily roundup.

Impact · This case puts BigLaw billing practices under a public microscope at a time when corporate clients and public entities are already pushing back on legal spending. High-profile billing controversies create precedent pressure — clients at other firms will use stories like this to demand more granular billing accountability, alternative fee arrangements, and cost justifications. Any firm billing at premium rates should expect increased client scrutiny.

Action · Review your firm's largest active matters for billing defensibility. Ensure rate increases are documented and justified, time entries are specific enough to withstand outside review, and engagement letters clearly authorize the billing structures in use. Prepare talking points for client questions this story may trigger.

Above the Law reports that nonequity partners across BigLaw are expressing significant dissatisfaction with their positions. Separately, the publication profiles the growing trend of lawyers moving from elite BigLaw firms to elite boutique litigation shops, which are attracting talent by offering more substantive, hands-on work that lawyers report missing at larger firms.

Impact · The nonequity partner tier — often the backbone of BigLaw's leverage model — is showing cracks. Combined with boutique firms actively recruiting mid-level and senior talent, firms face a dual retention risk: dissatisfied nonequity partners may leave, and the destinations offering better work experiences are becoming more visible and accessible. This threatens both capacity and institutional knowledge.

Action · Firm leadership should survey nonequity partners confidentially to assess satisfaction levels and identify specific grievances. Consider whether your partnership track, compensation structure, and work allocation model are competitive — not just against other BigLaw firms, but against the boutique shops that are increasingly positioned as credible alternatives.

A Gibson Dunn partner has been selected as the next SEC Enforcement chief, per Above the Law's Morning Docket citing Corporate Counsel. The appointment comes as SEC enforcement investigations reportedly hit historic lows in 2025, with commentary suggesting the new chief faces pressure to further reduce the agency's enforcement posture.

Impact · For firms with securities enforcement practices, this appointment signals a continued light-touch regulatory environment. Defense-side firms may see reduced caseloads from SEC enforcement actions. Plaintiff-side and compliance-advisory firms should prepare clients for a regulatory environment where private litigation and state-level enforcement may fill gaps left by federal inaction.

Action · Brief your securities and enforcement practice groups on the appointment. Advise corporate clients that reduced federal enforcement does not eliminate legal risk — state attorneys general and private plaintiffs may become more active. Adjust practice group strategy and business development accordingly.

The DOJ's Office of Information Policy has scheduled at least nine training events through FY26, covering FOIA processing, exemptions (1, 4, 5, 7), privacy considerations, litigation, procedural requirements, fees, administrative appeals, and compliance. Quarterly data reporting deadlines are set for April, July, and October 2026.

Impact · For firms handling FOIA litigation or advising government agency clients, this training push signals DOJ is investing in standardizing FOIA practices across agencies. Changes in how agencies process requests, apply exemptions, or handle appeals could shift the landscape for FOIA litigation and government transparency work.

Action · Assign an associate or paralegal to monitor DOJ OIP training materials and any resulting guidance updates. If your firm handles FOIA matters, review whether recent exemption application trends — particularly Exemptions 4, 5, and 7 — are shifting in ways that affect pending or anticipated cases.