<p>Today, artificial intelligence is cemented as essential infrastructure in the legal world, marked by a record <strong>$2.4 billion in funding for legal tech startups</strong> in 2025, which signals a significant opportunity to rebuild the legal stack. This widespread adoption sees over half of in-house legal teams actively using generative AI for tasks like legal research and drafting documents. However, this revolutionary technological shift is unfolding alongside severe professional liabilities, as documented incidents reveal that attorneys and even court staff have utilized generative AI, resulting in embarrassing public failures where court filings and draft judicial orders contained fabricated citations and factual inaccuracies, often called &quot;hallucinations&quot;. 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