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Welcome to this week's edition of The Legal Wire!

Sequoia backed Sandstone with a $10M seed to plug real business context into in-house legal workflows, signalling a shift from faster drafting to smarter, connected operations. Microsoft reinforced its legal AI ambitions by hiring a group of former Robin AI engineers and product leaders into its Word team, indicating deeper investment in AI-native legal drafting inside lawyers’ most used tool. Law schools put structure behind teaching AI as AALS and West Academic launched a multi-year program on pedagogy, policy, and research. Courts reminded everyone that legality still has rules: a Dutch judge voided a marriage after AI-generated wedding vows skipped the statutory declaration, and U.S. dockets teed up 2026’s big fights: algorithmic pricing, training-data copyright, and privacy claims that will test where liability lands. In the UK, pressure is intensifying to criminalise non-consensual sexualised deepfakes after the Grok fallout, another case study in why safety frameworks can’t be an afterthought.

The takeaway for firms and in-house teams: teach policy; document how AI outputs are grounded and verified; and lock down provenance, consent, and content controls before regulators (or plaintiffs) ask for your receipts.

This week’s Highlights:

• Industry News and Updates

• Client-Centered Family Law: How AI Improves Client Satisfaction

• AI Regulation Updates

• AI Tools to Supercharge your productivity

• Legal prompt of the week

• Latest AI Incidents & Legal Tech Map

➡️ Sequoia Backs Sandstone to Bring Business Context Into In-House Legal Workflows | AI legal tech startup Sandstone has publicly launched with a $10 million seed round led by Sequoia Capital, positioning itself as a platform that connects corporate legal teams more directly with the rest of the business. Founded by former in-house and consulting professionals, Sandstone uses AI to pull data from systems used by HR, sales, and other functions, giving legal departments clearer visibility into business priorities when handling contracts, approvals, and requests. The company is targeting small and midsize in-house teams in particular, arguing that better context, not just faster drafting, will help legal teams operate more strategically as AI adoption accelerates into 2026.
^{Jan 13, 2026, Source: Bloomberg Law}

➡️ Microsoft Recruits Former Robin AI Engineers to Strengthen Word’s Legal AI Capabilities | Microsoft has hired a group of former engineers, product managers, and AI specialists from legal tech startup Robin AI to join its Microsoft Word team. The hires bring deep experience in building AI-powered legal workflows directly inside Word, including contract review, drafting, and analysis tools designed for lawyers’ day-to-day work. The move follows Robin AI’s failed funding round and distressed sale, and reflects Microsoft’s broader strategy to embed more advanced, domain-specific AI capabilities into its Office products. Microsoft confirmed the hires but said it has no plans to acquire Robin AI.
^{Jan 12, 2026, Source: Legal IT Insider}

➡️ AALS and West Academic Launch Partnership on AI in Legal Education | The Association of American Law Schools and West Academic, a Barbri-owned company, have announced a multiyear partnership aimed at supporting the responsible integration of artificial intelligence into legal education. The collaboration will deliver a webinar series for law school faculty and administrators, curated online resources on AI pedagogy and policy, and original research examining faculty, student, and practitioner attitudes toward AI. The initiative is designed to help law schools navigate curriculum design, ethics, regulation, and practice readiness as AI increasingly reshapes legal training.
^{Jan 8, 2026, Source: ABA Journal}

➡️ UK Faces Pressure to Enforce Deepfake Law After Grok Backlash | The UK government is facing criticism for delays in bringing into force legislation that would criminalise the creation or commissioning of non-consensual sexualised deepfakes, following reports of abuse linked to Grok on X. Campaigners say the gap in enforcement has left women and girls exposed, as regulators including Ofcom investigate the platform’s handling of the issue. Prime Minister Keir Starmer has called the content “disgraceful,” while ministers signal support for regulatory action as scrutiny of AI-generated sexual imagery intensifies.
^{Jan 8, 2026, Source: BBC}

➡️ AI-Generated Wedding Vows Void Marriage Under Dutch Law | A Dutch court has ruled that a couple’s April 2025 wedding in Zwolle was not legally valid after their vows, drafted with the help of ChatGPT, failed to include the statutory declaration required under Dutch civil law. The court found that while the AI-generated vows expressed emotional commitment, they did not confirm the couple’s intention to assume the legal obligations of marriage, as mandated by the Dutch Civil Code. As a result, the marriage was deemed never to have been formalised, and the entry in the civil registry was ruled erroneous, despite the couple’s request to preserve the original wedding date for personal reasons.
^{Jan 7, 2026, Source: TechXplore}

➡️ AI on Trial: The Legal Battles Set to Define 2026 | Reported by Reuters. Courts are poised to play a decisive role in defining accountability for emerging technologies in 2026, as a wave of high-stakes litigation tests how existing laws apply to AI, algorithms, privacy, and digital platforms. According to Reuters, key cases include antitrust challenges to AI-driven pricing software used by landlords and hotels, copyright disputes over training AI models on protected content involving companies such as GitHub, Microsoft, and OpenAI, and major privacy lawsuits under decades-old statutes like California’s wiretapping law. Social media companies including Meta, Google, and TikTok also face thousands of claims alleging harm to minors through addictive product design. Together, these cases are expected to set critical legal boundaries for the digital economy as courts grapple with applying legacy legal frameworks to modern technologies.
^{Jan 5, 2026, Source: Thomson Reuters}

Legal Technology

Client-Centered Family Law: How AI Improves Client Satisfaction

By Hans Guntren

A year and a half ago, discussing AI in family law meant speaking in futuristic terms. Now, attorneys are actively seeking AI-powered solutions for a range of issues – intake, communications, case management, the list goes on. Our original assertions about adoption are proving true, and if anything, faster than expected.

I've spent considerable time traversing how AI can help family law attorneys manage information chaos and communication intensity. But with the shift from abstract to practical, there's another, equally fundamental question worth examining: As AI capabilities become real, how do we ensure they also improve client satisfaction?

Building AI systems across multiple industries and experiencing family law as a client gave me a perspective that's now gaining traction in legal tech. Client satisfaction in family law isn't primarily about speed or cost. It's also about feeling supported during the most vulnerable period of one’s life. Modern AI makes it possible to deliver both exceptional efficiency and deeply personalized client experience, but only when we design systems with client needs at the center.

Rethinking What Clients Actually Value

When I went through my divorce, my attorney was exceptional at the human elements. She understood my concerns, provided strategic guidance, and responded with an appropriate amount of empathy. But the administrative burden on both of us was crushing. I spent weeks cataloging financial information, only to repeat the process when the circumstances were no longer the same. Simple questions required phone calls and emails that disrupted both of our schedules. Document requests felt like scavenger hunts that played out over grueling weeks that turned into months.

In hindsight, the frustration was about information access and communication friction, not about legal expertise. 

Click here to continue reading the full article

The AI Regulation Tracker offers a clickable global map that gives you instant snapshots of how each country is handling AI laws, along with the most recent policy developments.

The most recent developments from the past week:

📋 13 January 2026 | Commission tells X to retain internal records on AI chatbot Grok: The European Commission has ordered X to retain all internal documents and data related to its AI chatbot Grok until the end of 2026. This follows mounting concerns over Grok generating sexualized deepfakes, including of minors, and comes as regulators weigh potential enforcement action under the Digital Services Act. While no formal investigation has yet been opened, the order ensures evidence is preserved as scrutiny of X’s AI and content moderation practices intensifies across Europe.

📋 13 January 2026 | Bhutan, Canada partner to strengthen AI policy and governance: It is reported that Bhutan and Canada have initiated a collaborative effort to enhance Bhutan's AI policy and governance. This partnership, under the 'Bridging Borders through AI' initiative led by Canada, involves a workshop in Thimphu aimed at educating policymakers and officials on AI's role in public service, ethics, and cybersecurity. Canadian Deputy Ambassador Mark Allen highlighted the mutual learning opportunity, noting Bhutan's unique perspective on mindfulness and Gross National Happiness as valuable contributions to global AI discourse. Insights from this consultation will be compiled into a white paper for GovTech by mid-March 2026, serving as a reference for AI governance in Bhutan.

📋 8 January 2026 | Trump shifts FTC pick to White House role advising on tech and competition: Reported by Reuters. President Donald Trump has withdrawn Ryan Baasch’s nomination to the Federal Trade Commission and instead appointed him deputy director of the National Economic Council, strengthening White House control over tech, telecom, and competition policy. This move alters the expected composition of the FTC, as the administration continues to review the role of independent agencies in shaping U.S. technology and competition policy.

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The Responsible AI Collaborative is a not‑for‑profit organization working to present real‑world AI harms through its Artificial Intelligence Incident Database.

View the latest reported incidents below:

⚠️ 2025-12-26 | Purported Deepfake Investment Video Reportedly Used in Scam That Defrauded Turkish Couple of 1.5 Million Lira (~$35,000 USD) | View Incident

⚠️ 2025-12-19 | Google AI-Generated Search Summary Reportedly Falsely Implicated Canadian Musician in Sexual Offenses, Leading to Concert Cancellation | View Incident

⚠️ 2022-09-18 | Pieces Technologies' Clinical AI Systems Allegedly Marketed With Misleading Performance Claims | View Incident

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