What they're not telling you: Authored by Brayden Lindrea via CoinTelegraph.com, Wall Street law firm Sullivan & Cromwell has apologized to a federal judge after submitting a court filing that contained around 40 incorrect citations and other errors caused by AI hallucinations. “We deeply regret that this has occurred,” Andrew Dietderich, co-head of Sullivan & Cromwell’s global restructuring team, wrote Friday in a letter to Chief Judge Martin Glenn of the US Bankruptcy Court for the Southern District of New York. “The Firm and I are keenly aware of our responsibility to ensure the accuracy of all submissions including under Local Bankruptcy Rule 9011-1(d), and I take responsibility for the failure to do so,” he said of an emergency motion filed nine days earlier.
# THE TAKE: Sullivan & Cromwell's AI Disaster Exposes the Real Problem This wasn't a glitch. It was cost-cutting theater. Sullivan & Cromwell—a $3 billion-revenue behemoth—didn't accidentally use ChatGPT because their associates were incompetent. They did it because AI vendors aggressively market to legal departments as labor replacement, and firms see compliance corners to cut. The apology matters less than what it conceals: BigLaw is already deploying AI across discovery, research, and drafting at scale. Courts will catch maybe one Sullivan & Cromwell per thousand violations. The real scandal isn't hallucinated citations—it's that elite law firms are systematically degrading legal product quality to preserve partner profits while billing clients at full rates. This was always the endgame. Efficiency theater masking margin extraction.
What the Documents Show
Excerpt from Andrew Dietderich’s letter to Chief Judge Martin Glenn. Source: Sullivan & Cromwell The incident highlights the risk AI tools can pose in high-stakes professional work without proper oversight. A database managed by legal technologist Damien Charlotin has recorded 1,334 incidents of AI hallucinations in court filings around the world, including more than 900 in the US. Charlotin pointed out that most of these hallucinations involve fabricated citations, though AI-generated legal arguments have also occasionally been identified. Dietderich said Sullivan & Cromwell has policies in place for the use of AI tools, which include a review of the citations it uses, but said the policies weren’t followed.
Follow the Money
Sullivan & Cromwell is one of the largest law firms in the US by revenue, ranking 30th on the AmLaw Global 200. The firm also represented crypto exchange FTX in its bankruptcy case. Dietderich said the law firm took “immediate remedial measures,” including a full review of the circumstances that led to the errors. The firm is also “evaluating whether further enhancements to its internal training and review processes are warranted,” Dietderich said. Dietderich also noted that the errors were spotted by a rival law firm. “I also called Boies Schiller Flexner LLP on Friday to thank them for bringing this matter to our attention and to apologize directly to them as well,” he said.
What Else We Know
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Primary Sources
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