Freshfields partners explore carving out AI unit worth billions

Senior partners at global law firm Freshfields, including global managing partner Alan Mason and M&A co-head Ethan Klingsberg, have explored carving out in-house legal AI unit Freshfields Lab into a separate company. The proposal, revealed after Mason accidentally forwarded internal emails to a firm-wide mailing list over the October 10–11, 2026 weekend, aims to attract external investors or prepare for an IPO amid soaring legal AI valuations like Harvey ($15.5B) and Legora ($5.6B).

Proposal to carve out Freshfields Lab

• ▪Freshfields global managing partner Alan Mason stated that two Wall Street banks had reached out regarding creating a separate legal entity for Freshfields Lab.
• ▪Freshfields partner Ethan Klingsberg stated that discussions about carving out Freshfields Lab were at an early stage and might not result in structural changes.
• ▪Freshfields global managing partner Alan Mason and U.S. corporate co-head Ethan Klingsberg discussed carving out the firm's legal technology unit Freshfields Lab into a separate legal entity to attract external investors.

Freshfields legal technology tools and commerciality

• ▪Freshfields partner Ethan Klingsberg stated that the commercial value of Freshfields Lab's AI tools remains uncertain when applied to external client data rather than internal firm data.
• ▪Freshfields Lab develops artificial intelligence tools for lawyers and clients, including document analysis, complex litigation management, and due diligence platforms.
• ▪Freshfields agreed to a deal with Anthropic in 2026 to develop specialist legal artificial intelligence tools for potential sale to rival law firms.

Accidental email leak of proposal

• ▪Freshfields global managing partner Alan Mason accidentally forwarded internal email discussions regarding the Freshfields Lab carve-out to the firm-wide distribution list $Freshfields All over the October 10–11, 2026 weekend.
• ▪Recipients of Freshfields global managing partner Alan Mason's misdirected email took screenshots before the message was recalled, leaking details of the Freshfields Lab proposal to the Financial Times.

Valuations and funding in legal technology

• ▪Law-focused artificial intelligence startups Harvey and Legora achieved valuations of $15.5 billion and $5.6 billion respectively.
• ▪Legal technology startup funding surpassed $2.4 billion in October 2025.
• ▪Freshfields global managing partner Alan Mason stated that legal technology companies command valuation multiples of 25 to 40 times revenue.

Adoption and development of legal artificial intelligence

• ▪OpenAI launched an artificial intelligence foundation and 26 ecosystem plugins for ChatGPT aimed at legal technology development in September 2026.
• ▪Major law firms and corporate legal departments are using artificial intelligence tools for contract drafting, regulatory monitoring, and first-pass discovery.
• ▪Anthropic added legal tools and over 20 Model Context Protocol connectors to Claude for legal industry software in May 2026.