Policy Alone Won't Stop AI Hallucinations in Law Firms, Infrastructure Will

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In April 2026, Sullivan & Cromwell apologized to a federal bankruptcy judge after AI-generated hallucinations appeared in a court filing, despite the firm having stated safeguards in place. The incident highlights a broader distinction between policy-based compliance and technical infrastructure — policies set expectations but cannot intercept errors at the moment they are generated. Experts argue that law firms need an AI harness layer built into their workflows, including real-time citation verification, confidence-threshold routing, and ongoing model-drift monitoring. Without these technical controls, hallucinated content can pass through multiple human review stages undetected, especially under deadline pressure or when junior staff are involved. The Sullivan & Cromwell case is being cited as evidence that governed AI infrastructure, not just acceptable-use policies, must be treated as a core design requirement for legal work.

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