It seems ChatGPT’s stint in the legal realm isn’t off to a smooth start. In a recent case, a law firm found itself under scrutiny after employing the AI tool to assess lawyers’ fees, resulting in an eyebrow-raising hourly rate of $600, which the judge deemed too high.
The Cuddy Law Firm, based in New York City, utilized ChatGPT to justify its hefty charges following a successful trial representing a mother and her special needs child against the New York City Department of Education. Under the Individuals with Disabilities Education Act, prevailing parties can be awarded reasonable attorneys’ fees, prompting the firm to seek a significant payout.
When asked about a fair hourly rate for an attorney with up to three years of experience in a disabilities education hearing, ChatGPT suggested figures ranging from $200 to $500 per hour, with specialized lawyers potentially commanding rates exceeding $1,200 per hour.
In light of this guidance, Cuddy Law Firm submitted a final bill totaling $113,484, equating to around $550 to $600 per hour. However, Federal District Judge Paul Engelmayer was unimpressed by the firm’s reliance on technology to calculate its fees, deeming the amount unreasonably high.
Engelmayer criticized the firm’s use of ChatGPT as “utterly and unusually unpersuasive,” highlighting the AI’s failure to disclose the data it used to arrive at its conclusions
Engelmayer criticized the firm’s use of ChatGPT as “utterly and unusually unpersuasive,” highlighting the AI’s failure to disclose the data it used to arrive at its conclusions. This lack of transparency raised doubts about the validity of the information provided by the tool, a recurring issue with generative AIs.
The judge referenced previous cases where ChatGPT had generated fictitious information, including one involving attorney Steven A. Schwartz, who unknowingly submitted a brief citing fabricated court decisions. Another instance saw lawyer Jae Lee face disciplinary action for citing a non-existent case in her legal research.
In the Cuddy case, Engelmayer decided to slash the requested legal fees in half, reducing them to $53,050, citing concerns over ChatGPT’s reliability. He cautioned against future use of the tool in fee applications unless its accuracy significantly improves.