L-MARS: Legal Multi-Agent System with Agentic Search and Citation-Faithfulness Audit

Large language models (LLMs) are increasingly integrated into legal drafting and research workflows, where incorrect citations or fabricated precedents can cause serious professional harm. Existing legal benchmarks largely emphasize statutory reasoning, contract understanding, or general legal question answering, but they do not directly study a central common-law failure mode: when asked to provide case authorities without external grounding, models may return plausible-looking but incorrect citations or cases. We introduce LegalCiteBench, a benchmark for studying closed-book citation recovery, citation verification, and case matching in legal language models. LegalCiteBench contains approximately 24K evaluation instances constructed from 1,000 real U.S. judicial opinions from the Case Law Access Project. The benchmark covers five citation-centric tasks: citation retrieval, citation completion, citation error detection, case matching, and case verification and correction. Across 21 LLMs, exact citation recovery remains highly challenging in this closed-book setting: even the strongest models score below 7/100 on citation retrieval and completion. Within the evaluated models, scale and legal-domain pretraining provide limited gains and do not resolve this difficulty. Models also frequently provide concrete but incorrect or low-overlap authorities under our evaluation protocol, with Misleading Answer Rates (MAR) exceeding 94% for 20 of 21 evaluated models on retrieval-heavy tasks. A prompt-only abstention experiment shows that explicit uncertainty instructions reduce some confident fabrication but do not improve citation correctness. LegalCiteBench is intended as a diagnostic framework for studying authority generation failures, verification behavior, and abstention when external grounding is absent, incomplete, or bypassed.

In high-stakes domains such as legal practice, a language-model answer is only useful to the extent that a reader can verify each claim against the source the system cites. Current grounded-generation pipelines score the answer as a whole, so a correct conclusion can rest on fabricated or loosely matched citations and still score well. Closing this gap requires both a system built for per-claim verification and an evaluation that measures it. We introduce GANDR (Grounded ANswer DRafter), a two-agent system in which a Drafter writes an answer in a structured legal-reasoning format and a separate Critic, with the same view as a human verifier, audits each claim against its cited source and emits a per-claim audit trace on every round. We pair it with a strict correctness criterion requiring every citation to resolve to a passage the retriever returned. On a 185-item legal benchmark where all six systems share one backbone, one retrieval surface, and one citation instruction, GANDR ranks first on every primary metric, reaching 70.8% strict accuracy and leading the strongest baseline by 11.3 points (p<0.01). Reverting the protocol-anchored commit rule lowers strict accuracy by 22.7 points, and the strict lead stays positive on three further backbones, at +3.2 to +6.5 points. This lead traces to the Drafter configuration and the protocol-anchored commit, not to rewriting. Against two law-trained annotators the audit flags under-supported claims at F1 0.84 as a binary detector, while its four-way verdict labels agree only weakly and are advisory. Code is available upon request.

Large language models systematically hallucinate legal citations -- fabricating statute references, citing repealed provisions, and confusing jurisdictions -- yet no automated method exists to measure or reduce this behavior at scale. We propose citation grounding (CG), a metric that verifies LLM-generated legal citations against a ground-truth citation graph extracted from 100.8 million Ukrainian court decisions (502 million edges, 21,736 unique statute nodes). CG decomposes into three components -- citation precision (does the cited provision exist?), citation relevance (is it contextually appropriate?), and citation temporality (was it valid at the relevant date?) -- enabling differential diagnosis of hallucination types. Empirical evaluation on 100 Ukrainian legal queries across five systems -- four commercial LLMs via AWS Bedrock (Claude Haiku 4.5, Mistral Pixtral Large, Amazon Nova Pro/Lite) and one RAG-augmented production system -- reveals CG ranging from 0.791 to 0.873, with 13-21% of citations hallucinated. To reduce hallucinations without human annotation, we introduce Citation Grounding DPO (CG-DPO): a method that constructs preference pairs algorithmically by corrupting verified citations from real court decisions via four targeted strategies. On a dataset of 2,244 court decisions, a Qwen2.5-7B-Instruct model fine-tuned with LoRA achieves 98.5% mean validation accuracy in distinguishing correct from corrupted citations (rewards margin +14.9, std < 0.3 pp across 3 seeds). The citation graph, evaluation framework, and CG-DPO dataset are released as open resources.