Judge slaps down law firm using ChatGPT to justify six-figure trial fee

You’d think lawyers – ostensibly a clever group of people – would have figured out by now that relying on ChatGPT to do anything related to their jobs could be a bad idea, but here we are, yet again, with a judge rebuking a law firm for doing just that. 

The legal eagles at New York-based Cuddy Law tried using OpenAI’s chatbot, despite its penchant for lying and spouting nonsense, to help justify their hefty fees for a recently won trial, a sum the losing side is expected to pay.

NYC federal district Judge Paul Engelmayer, however, rejected the submitted amount, awarded less than half of what Cuddy requested, and added a sharp rebuke to the lawyers for using ChatGPT to cross-check the figures. The briefs basically cited ChatGPT’s output to support their stated hourly rate, which does depend on things like the level and amount of research, preparation, and other work involved.

Cuddy told the court “its requested hourly rates are supported by feedback it received from the artificial intelligence tool ‘ChatGPT-4,'” Engelmayer wrote in his order [PDF], referring to the GPT-4 version of OpenAI’s bot.

“It suffices to say that the Cuddy Law Firm’s invocation of ChatGPT as support for its aggressive fee bid is utterly and unusually unpersuasive.” 

For Judge Engelmayer – who also disputed the proposed charges for other reasons, including the use of “dubious resource(s)” to arrive at a final bill of $113,484.62 – the use of ChatGPT to justify steep fees was a final straw.

“As the firm should have appreciated, treating ChatGPT’s conclusions as a useful gauge of the reasonable billing rate for the work of a lawyer with a particular background carrying out a bespoke assignment for a client in a niche practice area was misbegotten at the jump,” Judge Engelmayer said. 

One need not look far for ways in which the legal community has been led astray by generative AI of late, and Judge Engelmayer doesn’t – he cites two cases from the US Court of Appeals Second Circuit (under which NYC falls) to make his case.

“In two recent cases, courts in the Second Circuit have reproved counsel for relying on ChatGPT, where ChatGPT proved unable to distinguish between real and fictitious case citations,” the judge wrote, referring to the Mata v Avianca and Park v. Kim cases. Those cases involved ChatGPT being used to generate fake judicial opinions and fake authorities, respectively.

And the problem is far from confined to those examples. Even ex-Trump fixer Michael Cohen has been caught relying on bogus case law generated by AI.

In short, there’s a long way to go between ChatGPT being good for a laugh and good to replace a paralegal. 

Benjamin Kopp, a lawyer at Cuddy Law, told The Register his firm’s use of AI wasn’t anything like cases that fabricated court documents; this particular situation had nothing to do with influencing the legal process.

“The ‘cross-check’ referenced was a manner of saying that, in addition to support for our fees based upon the evidence provided, the rates were consistent with the range of rates and typical reasons for such rates that a parent … might find if using ChatGPT while researching what rates to expect,” Kopp told us.

Simply using ChatGPT wasn’t the sole hangup the judge had with Cuddy’s fee schedule; the firm apparently didn’t identify the inputs it used to get ChatGPT’s fee feedback or whether any of the data used was synthetic, the judge said in his order.

“The court therefore rejects out of hand ChatGPT’s conclusions as to the appropriate billing rates here,” Judge Engelmayer said. “Barring a paradigm shift in the reliability of this tool, the Cuddy Law Firm is well advised to excise references to ChatGPT from future fee applications.” 

Cuddy was ultimately awarded just $53,050.13. As to its future use of ChatGPT as a tool for anything to do with legal work, “we do not anticipate using ChatGPT barring, similar to as the court noted, a significant change or shift,” Kopp said.

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