A leaked email chain, first reported by the Financial Times, shows Freshfields' senior partners are considering spinning off the firm's in-house AI and legal tech arm into a standalone business that co-head of US corporate and M&A Ethan Klingsberg suggested could be "worth billions".

Global managing partner Alan Mason set out the carve-out plans in an email last Friday, addressed to Klingsberg. The two discussed attracting outside investment and a possible multibillion-dollar valuation. That much is on the record. What the emails do not say is whether any investor has been approached, or whether Freshfields' partnership has voted on the idea.

How did the leak happen?

The plans escaped the firm when Mason forwarded the chain over the weekend to a large internal distribution list named "$Freshfields All". The email was quickly recalled. Not quickly enough. Some recipients had already taken screenshots.

The exchange also revealed that Mason had already been in contact with two Wall Street banks about the proposal — a detail that suggests the idea is past the whiteboard stage, though a spokesperson's confirmation is absent from the reporting.

The unit at stake is Freshfields Lab, which builds legal tech tools for the firm's own lawyers and clients. Its remit spans document analysis and due diligence. Beyond that description, the leaked material offers no revenue figures, no headcount and no valuation methodology — the billion-dollar framing is a partner's aspiration, not an audited number.

Why does the benchmark matter?

The emails referenced Harvey and Legora, the legal AI heavyweights valued at $15.5 billion and $5.6 billion respectively. Each claims more than 1,000 customers. Both, unlike Freshfields Lab, operate as independent, tech-first businesses — which is precisely the model the spin-off would imitate.

The comparison cuts both ways. Harvey and Legora built standalone companies from inception, selling to thousands of external clients. Freshfields Lab, by contrast, was built to serve one firm and its client base. Whether an internal tools division can command anything close to those multiples remains the central untested claim.

What are rivals doing?

Freshfields is not alone in chasing the AI market. The pattern across elite firms is now visible in hard commitments:

• A&O Shearman — legacy Allen & Overy built ContractMatrix, an AI contract tool, with Harvey and Microsoft; the merged firm has since announced plans to roll out agentic AI agents for complex legal workflows, again with Harvey.
• Kirkland & Ellis — has set aside $500 million to build its own AI tools, including a proprietary platform that switches between underlying AI models without rebuilding, avoiding lock-in to any single provider.
• Wim Dejonghe — the former A&O global managing partner recently co-founded an AI-powered law firm focused on commercial contract review, targeting the billable hour itself.

Freshfields also struck a multi-year partnership with Anthropic earlier this year, rolling out Claude across all 33 of its offices. A spin-off of Freshfields Lab would sit alongside that arrangement, not replace it — though the leaked emails do not address how the two would interact.

What is the practical consequence?

For practitioners, a carve-out would test whether a law firm's internal tech stack can be valued like a venture-backed company rather than a cost centre. Outside investment in a firm-owned toolmaker would raise familiar professional-questions: conflicts between the firm's clients and the tech company's customers, and whether tools built for Freshfields lawyers can generalise. The emails answer none of this. They promise billions. They do not yet show a balance sheet.

In plain words: Freshfields' leadership wants to turn its internal AI workshop into an independent company, two banks are already advising, and the proof — investors, revenue, a vote — has not surfaced.