On Palantir’s Stage, Kirkland Ups Ante for Big Law AI Hype

Big Law innovation announcements traditionally are not flashy events. That changed last week when Kirkland & Ellis partner Erica Berthou walked onstage at a Palantir Technologies Inc. conference in Miami.

Berthou was at the tech company’s 10th customer-led developer conference to unveil the highest grossing law firm’s artificial intelligence project to “revolutionize” private funds work.

Between similar presentations by executives at data center builder NScale, Hertz, and Accenture, Berthou’s 11-minute demonstration described the law firm as serious about reducing the time its work takes. She also showed that Kirkland, which said last week it would spend $500 million to develop its AI platform, views technology as central to staying at the top of one of its most important business lines.

“Tools that sit atop and amplify our sprawling web of institutional knowledge, that is our real competitive advantage,” Berthou said, standing in front of a movie-theater sized screen that displayed the tool the firm developed with Palantir. The software company is known for its work with government agencies such as the US Department of Defense and Immigration and Customs Enforcement.

The spectacle was a unique event in Big Law. “This is the first time I’ve seen something that looks like a black turtleneck Steve Jobs-like presentation by a law firm,” said Eric Talley, a Columbia Law School professor. “That was a little startling.”

To some, the Palantir presentation showed Big Law’s AI ambitions exploding into the tech mainstream. Still, it left unanswered a major question Kirkland and other law firms will wrestle with: How does vastly reshaping their work using generative AI impact the traditional law firm business model?

Berthou began her presentation indicating Kirkland isn’t satisfied with the legal tech ecosystem. The “off-the-shelf” tools available to her team have “two major weaknesses,” she said. They don’t help execute the transactions, and they are trained on widely distributed deal information.

The tool Berthou showed off, called “the fund formation engine,” seemed to build the firm’s proprietary knowledge of fund formation documents into an all-in-one, automated workspace. She emphasized that it made the knowledge of the firm’s top partners available to lawyers across the firm, which last year helped launch more than 1,000 funds that raised more than $500 billion.

Using a hypothetical client seeking to raise $3 billion, the tool drafted a deal document based on a lawyer inputting a commercial term sheet. It then handled investor inquiries to develop bespoke bilateral agreements known as side letters and tracked obligations over the 10-year lifespan of the fund.

“What used to take days for a lawyer to analyze, discuss and draft, now happens in minutes,” Berthou said.

The presentation showed a firm “leaning into the evaporation of hours,” said Josh Kubicki, an Indiana University School of Law professor who consults Big Law firms on adopting AI.

“They’ve scaled what they do,” he said. “The market will tell us if they believe that’s a differentiator for Kirkland. It didn’t change what they do. It changed how they do it.”

Unanswered Questions

While a discussion of law firm economics was never likely to occur at a major tech company conference, the hole in the presentation was how Kirkland will charge clients for this new model of work, Kubicki said. Many firms are rushing headlong into AI projects while avoiding tackling that thorny subject, he said.

“Given Kirkland’s prominent position in the market, they should be able more than anyone to express the value of a new pricing model to their clients and probably still generate strong margins,” he said.

There have been other signs that the legal tech industry is going mainstream. Legal AI companies Legora and Harvey have hired celebrity pitchmen in Jude Law and “Suits” actor Gabriel Macht, respectively.

To Talley, the Columbia Law School professor who has written about new types of law firm ownership structures, the Kirkland presentation seemed to have two natural audiences. One is the law firm’s clients. The other is investors, whom he said Kirkland could someday pitch to buy a slice of the AI machinery it builds.

Kirkland’s chair Jon Ballis posted on LinkedIn that the firm’s “decision to invest in AI was simple—it’s an investment in better client outcomes.”

The pitch was a sign that real change is coming to the legal business, Tally said. He sees it in discussions with former students, who tell him they are using AI at Big Law firms far more than they ever anticipated.

It is even changing the way law professors think about their work. He joked that he may need his own black turtleneck to present how his law school classes are adapting to AI.

“I might have to be making a TED talk,” Talley said.