Freshfields' boss accidentally emails the whole firm his plan to spin out its AI unit "worth billions"

What's the deal? FreshfieldsDealroom has a profile for this one. Try Dealroom →' global managing partner Alan Mason accidentally forwarded an internal email thread to a broad internal distribution list over the weekend, revealing the magic-circle law firm's discussions about carving out its AI business, Freshfields Lab, into a separate entity that could attract outside investors or pursue an IPO. The email was recalled, but screenshots had already spread internally before the FT and Legal Business reported the contents.

What did the email say? In the exchange, Mason told Ethan Klingsberg, the firm's US co-head of corporate and M&A, that he was putting "a lot of work" into turning "our AI business in[to] a separate legal entity we can get external investors in / IPO." Mason argued legal-tech companies can command valuations of 25 to 40 times revenue, pointing to AI-native legal startups Harvey (valued at $15.5 billion) and Legora ($5.6 billion) as comparables. Klingsberg called a standalone business "probably worth billions" and told the FT the discussions are at a very early stage. Mason said two Wall Street banks have already approached the firm about the idea.

Why now? The emails show urgency: Klingsberg argued that moving quickly matters because competitors are likely to catch up and valuation multiples could fall. The plan under discussion would place Freshfields' AI revenue into a separate legal entity structured for outside capital, with proceeds eventually shared tax-efficiently between partners and the core legal business.

The signal: A magic-circle law firm racing to cash in on the AI valuation window — before it closes — shows how far elite professional-services firms now see in-house AI tools as standalone, fundable businesses rather than internal infrastructure.

Read more: Legal Business · Financial Times

Image credit: Stephan Guttinger, CC0, via Wikimedia Commons