diff --git a/web/paperclip_client.py b/web/paperclip_client.py
index ddec65e..1fded6a 100644
--- a/web/paperclip_client.py
+++ b/web/paperclip_client.py
@@ -1,7 +1,12 @@
-"""Paperclip project creation via direct DB access (embedded PostgreSQL)."""
+"""Paperclip integration via direct DB access (embedded PostgreSQL).
+
+Creates projects, issues, and plugin state entries to fully link
+a legal-ai case into Paperclip's workflow.
+"""
 
 from __future__ import annotations
 
+import json
 import logging
 import os
 import uuid
@@ -14,6 +19,8 @@ PAPERCLIP_DB_URL = os.environ.get(
     "PAPERCLIP_DB_URL", "postgresql://paperclip:paperclip@127.0.0.1:54329/paperclip"
 )
 
+PLUGIN_ID = "53461b5a-7f58-411a-9952-72f9c8d4a328"  # marcusgroup.legal-ai
+
 # Company IDs from Paperclip DB
 COMPANIES = {
     "licensing": "42a7acd0-30c5-4cbd-ac97-7424f65df294",   # CMP — רישוי ובניה
@@ -69,10 +76,20 @@ async def create_project(
                VALUES ($1, $2::uuid, $3, $4, 'backlog', $5)""",
             project_id, company_id, project_name, description[:500] if description else "", color,
         )
+        # Create initial issue linked to the project
+        issue_id, identifier = await _create_issue(
+            conn, company_id, project_id, case_number, title, prefix,
+        )
+
+        # Link issue to legal-ai case via plugin state
+        await _link_case_to_issue(conn, issue_id, case_number)
+
         return {
             "id": project_id,
             "company_id": company_id,
             "name": project_name,
+            "issue_id": issue_id,
+            "issue_identifier": identifier,
             "url": f"https://pc.nautilus.marcusgroup.org/{prefix}/projects/{project_id}/issues",
             "existing": False,
         }
@@ -80,6 +97,49 @@ async def create_project(
         await conn.close()
 
 
+async def _create_issue(
+    conn: asyncpg.Connection,
+    company_id: str,
+    project_id: str,
+    case_number: str,
+    title: str,
+    prefix: str,
+) -> tuple[str, str]:
+    """Create an issue in the project and return (issue_id, identifier)."""
+    issue_id = str(uuid.uuid4())
+
+    # Get next issue number for this company
+    row = await conn.fetchrow(
+        "UPDATE companies SET issue_counter = issue_counter + 1 WHERE id = $1::uuid RETURNING issue_counter",
+        company_id,
+    )
+    issue_number = row["issue_counter"]
+    identifier = f"{prefix}-{issue_number}"
+
+    await conn.execute(
+        """INSERT INTO issues (id, company_id, project_id, title, description, status, priority, issue_number, identifier)
+           VALUES ($1, $2::uuid, $3::uuid, $4, $5, 'todo', 'medium', $6, $7)""",
+        issue_id, company_id, project_id,
+        f"[ערר {case_number}] {title}"[:200],
+        f"תיק ערר {case_number}\nנוצר אוטומטית מממשק העלאת מסמכים",
+        issue_number, identifier,
+    )
+
+    logger.info("Created Paperclip issue %s: [ערר %s] %s", identifier, case_number, title)
+    return issue_id, identifier
+
+
+async def _link_case_to_issue(conn: asyncpg.Connection, issue_id: str, case_number: str) -> None:
+    """Store the legal-ai case number in plugin state, linked to the issue."""
+    await conn.execute(
+        """INSERT INTO plugin_state (plugin_id, scope_kind, scope_id, namespace, state_key, value_json)
+           VALUES ($1::uuid, 'issue', $2, 'default', 'legal-case-number', $3::jsonb)
+           ON CONFLICT (plugin_id, scope_kind, scope_id, namespace, state_key) DO UPDATE SET value_json = $3::jsonb""",
+        PLUGIN_ID, issue_id, json.dumps(case_number),
+    )
+    logger.info("Linked issue %s to case %s via plugin state", issue_id, case_number)
+
+
 async def get_project_url(case_number: str) -> str | None:
     """Find existing Paperclip project for a case number."""
     conn = await asyncpg.connect(PAPERCLIP_DB_URL)