Weekly AI & Legal News Summary | February 22, 2026

Weekly AI & Legal News Summary | February 22, 2026

The theme this week is clear: AI in legal is moving past the demo phase and into the harder questions — economics, risk, privilege, and accountability. Firms that treated AI as a pilot project are running out of runway, while courts are starting to draw real lines around AI-generated work product.

The New Economics of AI-Powered Legal Services — Thomson Reuters explores how AI is forcing a reckoning with the billable hour model. As AI accelerates task completion, firms face a fundamental tension: efficiency gains that compress revenue under traditional billing structures. The winners will be firms that redesign their pricing around value delivery rather than time spent. 🔗 This appears to be a Thomson Reuters gated/syndicated piece — no public URL located. The Google Alert linked to Thomson Reuters Legal Solutions directly.

How Will AI Transform Litigation, And What Should Law Firms Do To Prepare? — Above the Law and Opus 2 examine AI's impact across the litigation lifecycle, from discovery and case strategy to billing. The piece argues this isn't incremental change — it's a structural shift that requires firms to rethink staffing, workflows, and client engagement models now. 🔗 https://abovethelaw.com/2026/02/how-will-ai-transform-litigation-and-what-should-law-firms-do-to-prepare/

In-House Teams Stuck in Pilot Mode — A survey highlighted by The Global Legal Post reveals that most in-house legal departments remain in AI pilot phase, unable to scale past experimentation. Axiom's Sara Morgan characterizes it as a "threshold moment" — teams know they need to move but are caught between early adopters and those still evaluating. 🔗 https://www.globallegalpost.com/news/majority-of-in-house-legal-teams-still-stuck-in-pilot-phase-of-ai-use-survey-775534807

Managing Legal Risk in the AI Age — WilmerHale outlines what boards, directors, and legal counsel need to understand about AI risk governance. The key takeaway: boards should assess how deeply AI is embedded in operations and calibrate oversight accordingly — a compliance-first framing that signals where regulatory expectations are heading. 🔗 https://www.wilmerhale.com/en/insights/blogs/keeping-current-disclosure-and-governance-developments/20260217-managing-legal-risk-in-the-age-of-artificial-intelligence-what-key-stakeholders-need-to-know-today

$2,500 Sanction for AI Hallucinations in Brief — The Fifth Circuit ordered attorney Heather Hersh to pay $2,500 after identifying 21 instances of fabricated quotations or serious misrepresentations in her appellate brief. The panel noted the problem "shows no sign of abating" — another data point reinforcing that counsel bears full responsibility for AI output verification. 🔗 Reuters (paywalled): https://www.reuters.com/legal/ 🔗 Fifth Circuit Opinion (PDF): https://www.ca5.uscourts.gov/opinions/pub/25/25-20086-CV0.pdf 🔗 National Law Journal coverage: https://www.law.com/nationallawjournal/2026/02/19/no-end-in-sight-5th-circuit-expresses-concern-over-ai-hallucinations-in-briefs/

AI Documents Not Protected by Attorney-Client Privilege — In USA v. Heppner, Judge Jed Rakoff of the SDNY ordered production of 31 documents generated using Anthropic's Claude, ruling that AI-generated documents prepared by a defendant and later shared with counsel don't qualify for attorney-client privilege. A significant development for eDiscovery practitioners. 🔗 https://natlawreview.com/article/court-rejects-privilege-claim-over-ai-generated-documents

AI Legal Compliance for Law Firms in 2026 — JD Supra (via Clio) provides a compliance roadmap as U.S. firms navigate an increasingly complex regulatory landscape around AI adoption. Close to 80% of lawyers now report using AI in practice, making governance and compliance protocols essential. 🔗 https://www.jdsupra.com/legalnews/ai-legal-compliance-for-law-firms-what-5849246/

QICDRC Issues Practice Direction on AI Use — Crowell & Moring covers the Qatar International Court's Practice Direction No. 1 of 2026 governing AI in legal proceedings, joining a growing list of jurisdictions establishing formal guardrails. Court users remain responsible for verifying all AI-generated material before submission. 🔗 https://www.crowell.com/en/insights/publications/the-qicdrc-practice-direction-on-the-use-of-artificial-intelligence

Practitioner's Guide to AI Hallucinations — Holland & Knight's Mark Francis co-authored a practical guide published through the Thomson Reuters Institute/NCSC AI Policy Consortium, helping lawyers understand hallucination risks and implement verification protocols. 🔗 https://www.hklaw.com/en/insights/publications/2026/02/a-legal-practitioners-guide-to-ai-and-hallucinations

Columbia Law School: AI and Algorithmic Discrimination — Columbia's public interest law office is hosting a March 9 event on AI-driven algorithmic discrimination, featuring speakers from the DOJ Civil Rights Division and the ACLU. 🔗 https://www.law.columbia.edu/events/artificial-intelligence-and-algorithmic-discrimination-2026-03-09