Generative AI is transforming the legal industry by enhancing efficiency in tasks like document drafting and case analysis, but it also poses risks such as AI hallucinations—instances where AI generates plausible yet inaccurate information. Challenges with AI-produced evidence have prompted U.S. judicial bodies to consider new rules to manage 'deep fakes' effectively. A notable example of AI hallucinations occurred when Michael Cohen's legal team used Google's Bard, resulting in fabricated case citations that confused the court. The European Court of Justice has faced similar issues, highlighting the reliability challenges of AI in complex legal environments. Efforts are underway to refine AI's output through advanced techniques, ensuring safer and more reliable applications. Experts argue that while reducing hallucinations is a goal, AI systems may need to maintain some level of imperfection to preserve their functionality and creativity.