Ethics in Brief: The Hacking of Lawyers’ Computers and the Use of Hallucinatory GAI Citations Continue Unabated: Every Lawyer Must Be Familiar with the Controlling Rules of Ethics

By Charles Berwanger

Legal periodicals, and the media generally, continue to report the hacking of law firm computers and the continued use by attorneys of generative artificial intelligence (“GAI”) in preparing pleadings infected with hallucinated authority citations.

The FBI warned in a FLASH alert issued May 26, 2026 that a Russia-based gang, that has targeted US law firms since 2023, sharply increased its activity in early 2026.  In January 2026, a major law firm is reported to have had its data posted publicly after it declined the group’s ransom demand.  Two additional major law firms reportedly also faced similar exposures the first quarter of the year.  Violations of the attorney-client privilege protected materials of law firms continues as a major issue.

So, too, the use of GAI by attorneys for court filings with hallucinated and nonexistent authorities continues unabated. Legal periodicals uniformly reported on the misfortune of attorney Lopez in Mata v. Avianca (SDNY 2023) 678 F. Supp. 3d 443 due to his citing more than six fake cases; quotations; citations; and opinions derived from Chat GPT.  Mr. Lopez was fined $5,000 and the case was dismissed by the court.  Since then, Mr. Lopez’s experience apparently was not taken to heart by counsel in excess of at least 170 cases in the United States.  State and federal, trial and appellate, have issued decisions, frequently with sanctions, including referral to disciplinary authorities, because of fabricated cases; false citations; fabricated exhibits; misrepresented precedents – the list goes on.  In the last two weeks, counsel for a major insurance company having cited hallucinated case law are now the subject of an order to show cause.

The purpose of this article is to bring to the attention of the reader opinions discussing the rules of professional conduct which should be guiding the decision-making process of attorneys in the areas of protection of attorney-client privileged material and the use of GAI.

In 2020, the State Bar of California Standing Committee On Professional Responsibility And Conduct (“COPRAC”) issued Formal Opinion Number 2020 – 203.  The Committee publishes advisory opinions regarding the ethical propriety of hypothetical attorney conduct.  Although not binding, they are often cited in the decisions of the Supreme Court, the State Bar Court Review Department, and the Court Appeal.

Formal Opinion Number 2020 – 203 addresses the issue of “what are a lawyer’s ethical obligations with respect to unauthorized access by third persons to electronically stored confidential client information in the lawyer’s possession?”  The opinion, citing California Rules of Professional Conduct 1.1, 1.4, 1.6, 5.1, 5.2 and 5.3, concludes that “lawyers who use electronic devices which contain confidential client information must assess the risks of keeping such data on smart devices and computers, and take reasonable steps to secure their electronic systems to minimize the risk of unauthorized access.  In the event of a breach, lawyers have the obligation to conduct a reasonable inquiry to determine the extent and consequences of the breach and to notify any client whose interests have a reasonable possibility of being negatively impacted by the breach.”

The use and abuse of GAI have resulted in the recent American Bar Association Formal Opinion 512; and COPRAC’s “Practical Guidance For The Use Of Generative Artificial Intelligence In The Practice Of Law.” ( “Guidance”.)

ABA Formal Opinion 512 entitled “Generative Artificial Intelligence Tools” dated July 29, 2024 sets forth in detail the ethical duties of counsel in utilizing GAI.  The opinion concludes that “to ensure clients are protected, lawyers using generative artificial intelligence tools must fully consider their applicable ethical obligations, including their duties to provide competent legal representation, to protect client information, to communicate with clients, to supervise employees and agents, to advance only meritorious claims and contentions, to ensure candor to the court, and to charge reasonable fees.” (Opinion, page 1.)  Each of these precepts is mandated by the California Rules of Professional Conduct.  The opinion provides a thorough and complete analysis of the application of such rules to the attorney who determines to utilize GAI.

The second definitive source of ethical guidance, now a mandate, for the attorney who utilizes GAI is set forth in the COPRAC Guidance.  On May 14, 2026 the State Bar Board of Governors approved the updated Guidance and determined that what was previously identified as a “Guidance” was to be treated by attorneys as mandatory.

The breath and width of AI and the need for attorneys to understand the risks of the AI tools they use is highlighted.  Thus, “AI tools are increasingly embedded in the everyday practice and administration of law and are becoming ubiquitous across legal services.  Many technologies are used by lawyers, such as legal research platforms, document review systems, and practice management tools, incorporate some level of AI, even when not traditionally thought of as AI or labeled as such. This Practical Guidance is intended to address the ethical considerations arising from the expanding use of generative AI – enabled tools by lawyers.  It clarifies how existing professional responsibility obligations apply when lawyers use or rely on these technologies in the provision of legal services.” (Guidance, page 1.)

The California Legislature has taken notice of the widespread use by lawyers of GAI and the resulting erroneous citations and other issues.  The ill consequences of filing a pleading with one or more erroneous citation include not only destruction of the credibility of the attorney, but also a waste of judicial resources, with the risk that a judicial opinion may be based upon an erroneous citation. 

There is now pending in the California Legislature SB 574.

SB 574, as of August 13, 2026, is pending before the Assembly.  In summary, “this bill would prohibit an attorney from delegating the practice of law to generative artificial intelligence.  The bill would require an attorney who uses generative artificial intelligence to assist the practice of law to, among other things, not enter confidential personal identifying information, and other nonpublic information into a generative artificial intelligence system, as specified.  The bill would also require an attorney to take reasonable steps to verify the accuracy of generative artificial intelligence outputs and correct any erroneous or hallucinated output in any material used by the attorney.” Enforcement will be entrusted to the Judicial Council.  It is required to adopt rules for court administration, practice, and procedure, and to undertake certain responsibilities with regard to court facilities.

The Rules of Professional Conduct permeate the practice of law and particularly in the areas relating to the protection of attorney-client privileged materials and truthfulness of lawyers in their dealings with the courts, clients, and other lawyers. The complex world lawyers now live in must be guided by the rules of ethics.

It is strongly recommended that the foregoing opinions and “Guidance”, which is now mandatory, become familiar to all practitioners.