AI × Law

New shareholder derivative lawsuits target Microsoft, Adobe, and NVIDIA, alleging that their investments in AI have harmed shareholder value. These cases represent a new front in litigation related to AI, focusing on corporate governance and investment decisions.

A new securities class action lawsuit alleges Wix.com Ltd. and its senior officers made false or misleading statements regarding the competitiveness, performance, and costs of its AI-powered offerings, leading to a significant stock drop. The complaint focuses on control person liability and alleges misstatements related to AI product capabilities, Base44 costs, and Wix Harmony's limitations.

Character.AI and Google have settled several wrongful death lawsuits filed by parents of teenagers who died by suicide after interacting with Character.AI chatbots. The lawsuits alleged that the AI product was dangerously defective and that Google, as a contributor to Character.AI's development, shared responsibility. This highlights the growing legal and ethical challenges surrounding AI safety and content moderation, particularly concerning minors.

A self-represented litigant in Connecticut attempted to manipulate hypothetical AI systems reviewing court documents by embedding hidden prompt injections in tiny, white font. The court discovered the hidden text and sanctioned the individual by revoking their electronic filing privileges, highlighting integrity concerns when AI is used in legal processes.

The European Institute of Expertise and Experts (EEEI) published its first survey on AI in judicial expertise, finding 65% of surveyed experts use AI despite 73% lacking formal training. The report outlines a regulatory and ethical framework emphasizing that human experts retain full legal liability when using AI tools for document drafting and analysis.

Stockholm-based legal tech startup Aloi secured €6 million ($6.9 million) in funding to expand its enterprise legal AI platform across Europe and the U.S. Founded in 2024, the company focuses on transforming fragmented corporate legal data, contracts, and negotiation histories into structured decision intelligence.

San Mateo-based startup Turbo Law has raised $3.8 million in seed funding led by Revo Capital, with participation from Treeo VC, BridgeX Ventures, and Alchemist Accelerator. The platform builds a 'Fact Graph' from large matter files to generate litigation work products like chronologies, motions, and discovery responses for complex tort and medical malpractice cases.

A New York State Bar Association publication outlines the impact of AI on court administration and legal writing. It highlights a December 2025 survey showing that over 60% of responding federal judges use AI tools in their judicial work, primarily for legal research and document review.

A consolidated privacy class action against Otter.ai in the Northern District of California is set to address a key question: whether an AI transcription service is a neutral tool of the host or an independent third-party eavesdropper. The upcoming ruling could establish a major precedent for wiretap liability under federal law and California's Invasion of Privacy Act for AI meeting assistants.

Virginia-based startup Datagnome has launched a legal artificial intelligence assistant designed to operate within third-party platforms like Microsoft Teams and Slack. The tool aims to streamline legal operations directly inside the messaging apps legal teams already use.

Swiss knowledge management startup DeepJudge has introduced the Agent Handoff Protocol to preserve context and state across legal AI agents. The open initiative is backed by major industry players, including Harvey and Thomson Reuters.

A Connecticut state court judge sanctioned a pro se litigant for embedding invisible white-on-white text in filings instructing AI models to rule in his favor. The court rescinded the plaintiff's electronic filing privileges, marking the first known U.S. judicial decision addressing an indirect prompt injection attack.

The New York State Unified Court System (UCS) has implemented an Interim Policy on the Use of Artificial Intelligence and 22 N.Y.C.R.R. Part 161: Use of Artificial Intelligence Technology. These new guidelines aim to create a uniform statewide standard for AI use in legal research and writing, emphasizing that existing ethical obligations apply.

A New York State Bar Association article outlines how generative AI can assist with legal research and writing, explains how to identify potential AI use in court documents, and details the controversies and ethical considerations surrounding AI integration in legal operations. It offers best practices for ethical and responsible AI use for judges and litigators, referencing the New York State Unified Court System's policies.

Virginia-based startup Datagnome has launched an AI legal assistant designed to integrate directly into third-party communication platforms like Microsoft Teams and Slack. This development offers legal professionals new tools for streamlining operations within their existing workflows.

Washington and Lee University School of Law has introduced a mandatory one-credit course, "AI for Legal Practice," for all incoming students. The course focuses on responsible AI use, combining foundational AI knowledge with practical exercises and ethical considerations, including hands-on experience with the legal AI platform Harvey.

A New York City Bar Association committee released a policy paper outlining how existing professional conduct rules apply to AI tools, particularly for emerging companies and venture capital. It identifies professional duties implicated by AI use, offers a framework for suitable legal work, and recommends firm-level steps to address the current fragmented regulatory landscape.

Swedish legal AI company Legora is reportedly seeking a valuation of over $10 billion in early fundraising talks, a significant jump from its $5.6 billion valuation just four months prior. This underscores rapidly increasing investor interest in AI tools for legal professionals, with Legora's platform used by law firms and in-house legal teams to review, draft, and research documents.

Exterro explains how 'agentic frameworks' can transform AI outputs from 'black box' predictions into verifiable, court-admissible evidence. This approach provides a traceable chain of custody for AI decisions, crucial for high-stakes litigation and regulatory compliance.

myLawCLE is offering an on-demand CLE program for legal professionals to learn how to integrate AI into their practice. The course covers generative AI foundations, designing custom GPTs, deploying Copilot agents, and scaling AI efficiencies across legal teams for transactional, litigation, and operations work.