What happened
01
The company claimed its AI could draft legal documents and advise like a lawyer.
02
It had no evidence for the claim.
03
The case was part of the FTC's “Operation AI Comply”.
04
Settlement: $193,000 and notice to 2021 to 2023 subscribers.
Why this is a design failure
People rely on a legal service without knowing its limits.
The fair alternative
State the service's limits and refer real cases to a lawyer.
Do
Refer users to a professional early and disclose the assistant’s limits.
Don’t
Do not give definitive legal or health advice on your own.
Design guide for this case
If you're designing an AI legal assistant
Interface
Put a clear "What this tool can and can't do" panel on the landing page and on every generated document.
Words
In the marketing and in-product copy: "Never call the product a lawyer or say it performs like one unless you have evidence."
Flow
Early in each case, the flow checks complexity and suggests a licensed professional before the user relies on a drafted document.
Metrics
Don't count documents generated or subscriptions as success. Track how often users were referred to a professional when their case needed one.
Testing
Have a licensed lawyer review 10 documents the tool produced and record every error a user would not have spotted alone.
Before launch
01
Does every claim about the product's abilities have evidence behind it?
02
Are the tool's limits shown before users rely on it?
03
Is there an early referral to a qualified professional?