By PYMNTS | October 14, 2026
Senior partners at global law firm Freshfields have discussed making its in-house legal technology unit, Freshfields Lab, a separate company that could be opened to external investors, the Financial Times reported Wednesday (Oct. 14).
The senior partners believe the unit, which develops artificial intelligence tools for the firm’s lawyers and clients, could be worth billions, according to the report.
The report cited internal emails seen by the FT as well as the publication’s interview with Freshfields’ co-head of U.S. corporate and mergers and acquisitions, Ethan Klingsberg.
Klingsberg told the FT that the idea “just hit me last week,” per the report. He added: “Whenever you have something within your company that could be worth more if it were separate … if you’ve created something very valuable, you don’t want to dilute its value by burying it in something else.”
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Klingsberg added that the discussions were at an early stage, that they may not result in a change and that the value of the AI tools to other businesses that don’t have Freshfields’ data is uncertain, according to the report.
The valuations of other law-focused AI firms include Harvey at $15.5 billion and Legora at $5.6 billion, the report said.
Agentic AI is changing the pace of deployment of AI in legal departments, PYMNTS reported in August. AI agents are now reviewing contracts, monitoring regulatory changes and handling first-pass discovery in production environments at major law firms and corporate legal departments.
It was reported in October 2025 that funding to legal technology startups had surpassed $2.4 billion at that point in the year. PYMNTS reported at the time that the surge in funding reflected confidence that automation can relieve the sector’s document-heavy workloads and unlock new operating leverage for firms.
OpenAI announced in September that it launched an AI foundation designed to be used by law firms and legal technology companies to build AI products and workflows. The company also added 26 new ecosystem plugins that connect ChatGPT to specialized tools used by law firms.
Anthropic said in May that it added several new tools to Claude for the legal industry, including more than 20 Model Context Protocol (MCP) connectors that link Claude to legal industry software as well as 12 plugins for specific legal work and practice areas.
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