Kirkland Bets $500M on In-House AI, Partners With Palantir

Kirkland & Ellis, the world's largest law firm by revenue, has committed $500 million to build its own AI systems in-house, choosing custom engineering over the off-the-shelf legal tools its rivals still lean on. More than $100 million of that is scheduled for the first year, the Financial Times reported, as part of a multi-year partnership with Palantir Technologies.

The first product is a Fund Formation Engine that automates private-equity fundraising workflows: drafting fund documentation, preparing side letters, tracking investor agreements and monitoring compliance for GPs and their limited partners. Kirkland owns, or has the right to own, all of the technology, and its outside partners will not have access to confidential client data.

Erica Berthou, a Kirkland partner on the firm's executive committee, told the FT that off-the-shelf legal AI has two structural weaknesses. It cannot knit together the "complex moving parts of transaction execution," she said, and it is "trained on widely available market knowledge which tends to mean that they serve one common denominator." Bespoke systems, in her framing, are what you build when the point is to differentiate rather than to automate.

Kirkland is not alone in the build camp. Clifford Chance rolled out an internal AI platform to its lawyers in 2023 and this July launched an AI knowledge-management system with Microsoft and Epiq Advisory that already holds more than 400,000 documents. A&O Shearman is co-developing tools with Microsoft and Harvey. Legal-services procurement has become a distinct thread inside our broader enterprise-AI coverage, which has run 267 stories in the last 90 days.

Not every firm is convinced. Ropes & Gray CIO Marsha Stein said "the technology is changing so quickly now that it doesn't appear to us at this point that doing something proprietary makes sense," and would rather buy. The bet that stops that reasoning is competitive: one industry observer put it plainly, "basically you are building the competitor of the future by buying technology off the shelf." Vendors like Harvey and Legora are already pitching corporate legal departments directly, meaning the tool a firm licenses today can become the counterparty its client uses tomorrow.