This week’s legal AI landscape is defined by deepening practitioner anxiety — about clients using AI unsupervised, about hallucinated citations attracting sanctions, and about Europe tightening its regulatory grip on AI tools lawyers and clients already rely on. Meanwhile, Big Law is accelerating its AI tooling arms race, with a new litigation-specific platform landing at a major firm just days ago.
Top story: The EU has classified ChatGPT as a ‘Very Large Online Search Engine’ under the Digital Services Act — a landmark regulatory move with direct implications for how legal professionals and their clients use AI-assisted research tools.
EU Designates ChatGPT a ‘Search Engine’ Under Strictest Digital Rules
Euronews · Regulation
The European Commission designated ChatGPT as a Very Large Online Search Engine and Reddit and Roblox as Very Large Online Platforms under the Digital Services Act, after each surpassed 45 million monthly EU users. All three now have four months to comply with obligations including systemic risk assessments, independent audits, and data-sharing with regulators. For legal teams advising clients on AI use or compliance risk in the EU, the reclassification of a generative AI chatbot as a search engine sets a significant regulatory precedent for how AI services will be governed going forward.
Wilson Sonsini Takes Commercial Licence for AI Litigation Platform LexText
Legal IT Insider · Tools
Major Silicon Valley law firm Wilson Sonsini has taken a paid commercial licence for LexText, a litigation drafting and analysis platform founded in 2024, making it the first Am Law firm the startup has publicly announced. LexText’s guided workflows cover pleadings, discovery, motions, briefs, and case analysis, with the firm’s securities litigation co-chair describing it as ‘built for the way litigators actually work.’ The deal — notably a full commercial licence, not a pilot — signals Big Law is moving beyond experimentation into binding AI procurement for core litigation workflows.
https://legaltechnology.com/wilson-sonsini-licenses-lextext-for-litigation-practice/
Clients Using AI for Their Own Legal Work Creates Privilege Crisis
Scura Law / NJ Courts · Risk
New Jersey lawyers sounded the alarm this week that clients who independently use AI tools to conduct their own legal work risk waiving attorney-client privilege and inadvertently running up legal bills — a concern sharpened by a February 2026 federal ruling in United States v. Heppner that materials created using consumer AI tools are not protected by attorney-client privilege or the work product doctrine. The New Jersey Supreme Court has also mandated that all lawyers must complete at least one CLE credit per cycle on technology use in law, effective January 2027. The privilege exposure gap — where clients use tools like Claude or ChatGPT to analyse their own legal situations — is fast becoming a front-line risk management issue for firms and in-house counsel alike.
AI Hallucination Sanctions Escalate: NJ Lawyer Fined for Second Offence
Alan N. Walter, Counsel / irys.ai · Legal
A New Jersey-licensed attorney was sanctioned $5,000 by a federal court after submitting a brief containing five erroneous citations and one entirely fabricated case — all AI-generated — marking his second such offence. The case underscores that courts are treating repeat AI misconduct with increasing severity, and that existing professional conduct rules fully apply to AI-assisted filings. With the NJ Supreme Court’s preliminary guidelines making clear that AI use does not excuse false or fabricated material, practitioners face a sharpening duty to verify every AI-generated output before submission.