Freshfields Evaluated Spinoff of Internal AI Unit
The law firm is considering separating its proprietary artificial intelligence division into an independent entity.
Updated on Oct. 14, 2026 in Artificial Intelligence
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Freshfields Bruckhaus Deringer has begun evaluating a potential spinoff of its internal artificial intelligence unit. Partners are exploring the move to separate the firm's AI assets from its core legal practice.
Why it matters
The firm aims to prevent diluting the unit's value by keeping it housed within the legal practice, potentially increasing its market worth as an independent asset. Executives are seeking to capitalize on growing industry interest in specialized legal technology.
Freshfields' internal tools are designed to handle contract review, regulatory monitoring, and first-pass discovery for clients. These proprietary systems must now compete with broader industry developments like the 20 Model Context Protocol connectors recently added by Anthropic.
The players
Freshfields Bruckhaus Deringer
This global law firm provides legal counsel to clients and maintains an internal division focused on developing custom artificial intelligence technology.
Harvey
This private company is a legal-focused AI firm that currently holds a market valuation of $15.5 billion.
Anthropic
This artificial intelligence startup developed the Claude large language model and has recently expanded its suite of tools specifically for the legal industry.
OpenAI
This research and deployment organization created the foundation for AI applications now being adopted by firms to handle complex legal tasks.
The details
The internal unit specializes in creating tools for lawyers that automate document-intensive tasks such as contract review and discovery. While the firm currently uses these tools for internal operations and client work, the viability of selling these products to external businesses without access to Freshfields' proprietary data remains unproven.
Timeline
Legal technology startup funding reached $2.4 billion in October 2025.
Anthropic integrated tools for the legal industry into Claude in May 2026.
OpenAI introduced an AI foundation for law firms in September 2026.
Freshfields executives discussed the potential AI unit spinoff in October 2026.
The Tech Race
The firm's move follows the momentum established by the 2025 surge in legal technology venture capital funding. This spinoff evaluation mirrors a wider trend where legal institutions attempt to bridge the gap between traditional professional services and high-growth AI development.
Clients of the firm may experience changes in how their legal discovery and contract review processes are managed if the unit becomes independent. The move could also influence the availability and cost of specialized AI tools for smaller legal practices as the market for these technologies continues to evolve.
The takeaway
Separating legal-focused AI tools into independent companies is an increasingly common strategy to maximize the value of specialized software assets. Firms must determine if the efficiency gains of these tools provide sufficient competitive advantage to justify keeping them proprietary.
Further reading
For more information on current industry trends, visit the Artificial Intelligence section.
Source note: This article includes information reported by PYMNTS.
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