The Sullivan & Cromwell AI Filing: Where the Workflow Actually Broke
S&C had mandatory AI training, a firmwide verification standard, and a separate citation review policy. All three failed on the same filing. The teaching case for every law firm using AI.
On April 18, 2026, Andrew Dietderich, co-head of Sullivan & Cromwell’s global restructuring group, wrote to Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York. He apologized for roughly 40 inaccurate citations and other errors across an emergency motion and its supporting filings in the Chapter 15 case of In re Prince Global Holdings Limited.
Some of the errors were AI hallucinations: fabricated case citations, misquoted authorities, non-existent legal sources. Others were manual errors that the firm’s standard citation review process failed to catch.
This is a teaching case for every law firm using AI. Not because S&C is uniquely negligent. Because S&C is uniquely well-resourced, and the failure still happened.
What the Letter Actually Says
Dietderich’s letter confirms the firm had:
- Mandatory AI training, two required modules before any lawyer gets tool access
- Tracked and verified training completions
- A firmwide “trust nothing and verify everything” standard
- Office Manual language requiring independent verification of all AI output
- A separate firm policy on review of legal citations
Then the letter concedes:
- The AI policy “was not followed in connection with the preparation of the Motion.”
- The standard citation review process “did not identify the inaccurate citations.”
- Manual errors were also missed.
- The errors were caught by opposing counsel at Boies Schiller Flexner, not by the firm itself.
Three separate internal systems (AI policy, citation review, supervisory review) failed simultaneously on the same filing. The letter does not explain how.
The Missing Layer
Firm-level governance. Does the firm have an AI policy? Does it train its lawyers? Does it require verification? The answer on paper is yes to all three.
Matter-level workflow documentation. On this filing, which tool was used, by whom, with what prompt? What was verified, when, and by whom? That record is the audit trail.
Firm-level governance answers policy questions. Matter-level workflow documentation answers factual questions. When a judge asks what happened, only the second set answers. Rule 5.3 supervision, Rule 3.3 candor, and Local Bankruptcy Rule 9011-1(d) warranty obligations all operate at the matter level, not the firm level. A policy that says “verify everything” does not produce a record that verification happened on this filing. Only documented verification does.
The Five-Layer Workflow
The workflow JDAI builds for solo and small firms closes the matter-level gap at five sequential points. Each layer creates a record that survives the matter.
Layer 1 - Tool Authorization
Before any AI tool touches client work, the firm maintains an approved tools list. A tool joins the list only after the firm has executed a Data Processing Addendum (DPA), confirmed the training-data default (opt-out where available), and classified the tool by permitted use: research, drafting, summarization, or none.
For Prince Global, the first question would be: was the tool used on this filing on the approved list for drafting bankruptcy pleadings? That answer lives in a tool inventory document, updated when vendors change terms.
Layer 2 - Input Classification
Before any input goes to the tool, the lawyer classifies the data against the DPA. Client-confidential content goes only to tools where the DPA permits it. Prospective-client and third-party confidential content is flagged separately.
This layer is not paperwork. It is the moment Rule 1.6 either holds or breaks. Florida Bar Ethics Opinion 24-1 and ABA Formal Opinion 512 both require informed judgment at this step, and the record of that judgment belongs in the matter file.
Layer 3 - Independent Verification
Every citation in the draft is independently located in Westlaw, Lexis, or the official reporter. The underlying opinion is read for the proposition cited, not just confirmed for existence. Every case is Shepardized or KeyCited. The drafter independently searches for controlling adverse authority under Rule 3.3(a)(2).
Each step is logged on the matter file with the drafter’s initials and a timestamp. If a citation cannot be verified, it does not stay in the filing.
This is the layer that would have caught every AI hallucination in the Prince Global motion, and most of the manual errors too. Not because S&C’s lawyers did not know to do it. Because the documented discipline of logging each step forces the verification to actually happen.
Layer 4 - Supervising Attorney Sign-Off
Before filing, the supervising attorney signs the verification log, not just the draft. Signing the draft is signing the output. Signing the verification log is signing the process.
Under Rule 5.3, the supervising attorney owns what the drafter produced. Under Local Bankruptcy Rule 9011-1(d), which Dietderich cited in his own letter, the signing attorney warrants the filing’s accuracy. The sign-off creates a named, timestamped owner for both.
For emergency filings, the workflow requires a second-attorney review on every cite. Emergency motions are exactly the moment when verification shortcuts happen. The protocol tightens under deadline pressure, it does not loosen.
Layer 5 - Matter-Level Audit Trail
All five artifacts live in the matter file:
- Tool authorization reference
- Input classification log
- Verification log, citation by citation
- Supervising attorney sign-off with timestamp
- AI output retained per firm retention policy
When a judge, a client, or a malpractice carrier asks what happened, the firm produces the trail in minutes. When the trail is produced, the conversation shifts from “Did you use AI improperly?” to “Here is what we did and when.” That shift is worth more than any firmwide policy.
Emergency Filing Protocol
Prince Global was an emergency motion for provisional relief under 11 U.S.C. § 1519. The workflow treats emergency filings as the high-risk category they are.
- No filing without a completed verification log, period.
- Mandatory second-attorney review on every cite.
- If deadline pressure prevents full verification, the filing narrows or an extension is requested.
“We ran out of time” is not a defense. It is the admission that the workflow was not scaled for the pressure. The protocol exists so that admission never needs to be made.
Why Small Firms Have an Advantage
Sullivan & Cromwell has more than 900 lawyers, a dedicated knowledge management function, and Chambers Band 1 partners. If the governance gap can open at S&C, it can open anywhere.
Solo and small firms actually have an advantage. Fewer lawyers means fewer handoffs, and fewer handoffs means tighter documentation is achievable. The workflow scales down cleanly to a two-lawyer firm. It does not scale up cleanly from nothing.
The firms that survive the next wave of AI-related sanctions, malpractice claims, and bar complaints will not be the ones with the most comprehensive policies. They will be the ones with matter-level audit trails they can produce on demand.
Attorney Review Disclosure: This article describes a general framework. Every firm’s implementation must be reviewed by licensed counsel for jurisdiction-specific ethics compliance. Rules cited are ABA Model Rules and Florida Rules of Professional Conduct; other jurisdictions may differ. Nothing in this article constitutes legal advice.
If you want to see where your firm sits on the five-layer workflow before something breaks, start with the JDAI AI Readiness Self-Assessment.