Character mistake: At the end, when Mitch tells Agent Tarrance that the government can convict the law firm on mail fraud and racketeering, he says he got the idea while he was studying for the bar exam. He actually got the idea from a client earlier in the film when the client was complaining about being over-billed and tells Mitch that every time a bill is mailed through USPS, the firm is committing mail fraud which is a federal offense, punishable by fines and prison.
Continuity mistake: When Tom Cruise first encounters Gene Hackman, Gene is nonchalantly leaning in a doorway with both hands in his pockets. In the next shot, Gene is holding a briefcase that wasn't there before. It's a good thing the briefcase arrived, since Gene makes mention of it immediately after. (00:17:00)
Continuity mistake: Mitch and Abby are on a rooftop overlooking the Memphis skyline. The setting sun is brightly shining at the top of the screen. After only 45 seconds of dialogue, the sun is almost completely set. The sun would have needed at least 15 minutes to travel that far. (00:10:55)
Factual error: Early in the movie, Mitch is shown walking through a lounge at Harvard Law School. The lounge has multi-colored chairs and couches. It does not exist at Harvard. This lounge is actually the Mark Twain's Lounge in the University Center on the campus of The University of Memphis.
Plot hole: In Cayman, Abby drugs Avery's drink at dinner. It takes effect as they return to the bungalow, and Avery passes out on the foot of the bed, fully clothed. In the next shot, Abby is in the kitchen, carrying the Mafia files. The bedroom is seen in the background, only now Avery is under the covers and without a shirt. After being knocked out by a "Mickey Finn," he wouldn't wake up, undress, and get into bed. Nor would Abby be able to do this - he is too heavy and bulky for her to move and undress alone, plus she would not have enough time to do that and also transport the many files, get them copied, and return them to the bungalow before Avery awoke. Avery would also be suspicious, knowing he was ill and had passed out atop the bed, but awoke undressed under the covers.
Continuity mistake: As Tom Cruise is leaving Mud Island on a monorail car he passes another car with a Firm henchman in it. They see each other and the man gets out and runs across the bridge to catch Tom as his car stops. This is impossible since there are really only two cars which end up on both sides at the same time.
Continuity mistake: 3/4 of the way through, Tom's boss is talking to Tom's wife at the school through a chain-link, and every time the scene switches between the two, the position of his fingers in the fence changes.
Continuity mistake: In the scene when Abigail and Mitch part. Abigail gets into the car and starts the engine but doesn't reach for the seatbelt. The camera switches to Mitch, he says "Take care of yourself" and then it cuts back to Abigail driving away but this time wearing a seatbelt. The time between the two cuts is too short for putting the seatbelt on, especially because Abigail didn't even make a move to reach for it before the first cut.
Character mistake: After learning of the firm's conspiracy, Mitch is worried about violating attorney/client privilege in order to expose it. Since Mitch knows that a crime is being committed (e.g. mailing the overcharged bills through the Post Office), attorney/client privilege doesn't apply.
Factual error: Near the end of the movie, Agent Terrence asks Mitch why he didn't release the recording to the media. Mitch replies that it would have been against the law. This is actually incorrect. Tennessee, where the movie is based, is a one-party consent state. Which means only one party needs to give consent to a conversation being recorded. That one party is Mitch McDeere.
Continuity mistake: After Mitch records Wayne Tarrance's rant at the racetrack, when the rant is played back to Tarrance over the phone, the recording doesn't match what Tarrance originally said.