Ethical obligations to clients intersect with AI usage in multiple ways. ABA Model Rule 1.4 requires attorneys to keep clients reasonably informed and to explain matters to the extent necessary for clients to make informed decisions. Several state bar opinions suggest that attorneys should obtain informed consent before inputting confidential client information into AI tools, particularly those that use data for model training.
The confidentiality analysis turns on the AI tool's data-handling practices. Many general-purpose AI platforms explicitly state in their terms of service that they use input data for model training and improvement. This creates significant privilege and confidentiality risks. Even legal-specific platforms may share data with third-party vendors or retain information on servers outside the firm's control. Attorneys must review vendor agreements, understand data flow, and ensure adequate safeguards exist before using AI tools on client matters.
When AI-generated errors reach a court filing, clients deserve prompt notification. The errors may affect litigation strategy, settlement calculations, or case outcome predictions. In extreme cases, such as when a court dismisses claims or imposes sanctions, malpractice liability may arise. Transparent communication preserves the attorney-client relationship and demonstrates that the lawyer prioritizes the client's interests over protecting their reputation.
Jurisdictional Variations: Illinois Sets the Standard
While the ABA Model Rules provide a national framework, individual jurisdictions have begun addressing AI-specific issues. Illinois, where the Integrity Investment Fund case was filed, has taken proactive steps.
The Illinois Supreme Court adopted a Policy on Artificial Intelligence effective January 1, 2025. The policy recognizes that AI presents challenges for protecting private information, avoiding bias and misrepresentation, and maintaining judicial integrity. The court emphasized "upholding the highest ethical standards in the administration of justice" as a primary concern.
In September 2025, Judge Sarah D. Smith of Madison County Circuit Court issued a Standing Order on Use of Artificial Intelligence in Civil Cases, later extended to other Madison County courtrooms. The order "embraces the advancement of AI" while mandating that tools "remain consistent with professional responsibilities, ethical standards and procedural rules". Key provisions include requirements for human oversight and legal judgment, verification of all AI-generated citations and legal statements, disclosure of expert reliance on AI to formulate opinions, and potential sanctions for submissions including "case law hallucinations, [inappropriate] statements of law, or ghost citations".
Arizona has been particularly active given the high number of AI hallucination cases in the state—second only to the Southern District of Florida. The State Bar of Arizona issued guidance calling on lawyers to verify all AI-generated research before submitting it to courts or clients. The Arizona Supreme Court's Steering Committee on AI and the Courts issued similar guidance emphasizing that judges and attorneys, not AI tools, are responsible for their work product.
Other states are following suit. California issued Formal Opinion 2015-93 interpreting technological competence requirements. The District of Columbia Bar issued Ethics Opinion 388 in April 2024, specifically addressing generative artificial intelligence in client matters. These opinions converge on several principles: competence includes understanding AI technology sufficiently to be confident it advances client interests, all AI output requires verification before use, and technology assistance does not diminish attorney accountability.
The Path Forward: Responsible AI Integration
The legal profession stands at a crossroads. AI tools offer genuine efficiency gains—automated document review, pattern recognition in discovery, preliminary legal research, and jurisdictional surveys. Rejecting AI entirely would place practitioners at a competitive disadvantage and potentially violate the duty to provide competent, efficient representation.
Yet uncritical adoption invites the disasters documented in hundreds of cases nationwide. The middle path provided by the Illinois courts requires human oversight and legal judgment at every stage.
Attorneys should adopt a "trust but verify" approach. Use AI for initial research, document drafting, and analytical tasks, but implement mandatory verification protocols before any work product leaves the firm. Treat AI-generated citations as provisional until independently confirmed. Read cases rather than relying on AI summaries. Check the currency of legal authorities. Confirm that quotations appear in the cited sources.
Law firms should establish tiered AI usage policies. Low-risk applications such as document organization or calendar management may require minimal oversight. High-risk applications, including legal research, brief writing, and client advice, demand multiple layers of human review. Some uses—such as inputting highly confidential information into general-purpose AI platforms—should be prohibited entirely.
Billing practices must evolve. If AI reduces the time required for legal research from eight hours to two hours, the efficiency gain should benefit clients through lower fees rather than inflating attorney profits. Clients should not pay both for AI tool subscriptions and for the same number of billable hours as traditional research methods would require. Transparent billing practices build client trust and align with fiduciary obligations.
Lessons from Integrity Investment Fund
The Integrity Investment Fund case offers several instructive elements. First, the attorney used a reputable legal database rather than a general-purpose AI. This demonstrates that brand name and subscription fees do not guarantee accuracy. Second, the attorney discovered the errors and voluntarily sought to amend the complaint rather than waiting for opposing counsel or the court to raise the issue. This proactive approach likely mitigated potential sanctions. Third, the attorney took personal responsibility, describing himself as "horrified" rather than deflecting blame to the technology.
The court's response also merits attention. Rather than immediately imposing sanctions, the court directed defendants to respond to the motion to amend and address the effect on pending motions to dismiss. This measured approach recognizes that not all AI-related errors warrant the most severe consequences, particularly when counsel acts promptly to correct the record. Defendants agreed that "the striking of all miscited and non-existent cases [is] proper", suggesting that cooperation and candor can lead to reasonable resolutions.
The fact that "the main precedents...and the...statutory citations are correct" and "none of the Plaintiffs' claims were based on the mis-cited cases" likely influenced the court's analysis. This underscores the importance of distinguishing between errors in supporting citations versus errors in primary authorities. Both require correction, but the latter carries greater risk of case-dispositive consequences and sanctions.
The Broader Imperative: Preserving Professional Judgment
