Freshfields, a leading international law firm, issued an unreserved apology following a leaked internal email in which senior leaders appeared to exclude Middle Eastern sovereign wealth funds from potential investors in the firm’s AI legal technology venture. The email exchange, inadvertently circulated to a wide internal distribution list, sparked concerns over remarks perceived as dismissive of Middle Eastern investors.
The exchange, involving Freshfields’ global managing partner Alan Mason and Ethan Klingsberg, co-head of US corporate and mergers and acquisitions, centered on plans to spin out the firm’s legal technology unit, Freshfields Lab, to external investors. The lab develops AI-based tools designed to assist lawyers and clients with tasks such as document analysis and litigation management. Discussion highlighted the potential for creating a business valued in the billions, comparable to prominent legal tech companies valued between $5.6 billion and $15.5 billion.
In the emails, Klingsberg referenced targeting “sophisticated investors that are respected by the rest of the investor community for their leadership,” and added that this “probably” excluded “Middle Eastern sovereign wealth money.” Shortly after, Mason mistakenly forwarded the email exchange widely within the firm before attempting to recall it. Some recipients captured screenshots, leading to public exposure of the comments.
Responding to the incident, Freshfields issued a statement expressing sincere regret for the remarks, emphasizing that they do not represent the firm’s views or those of the individuals involved. The firm reaffirmed its respect for its Middle Eastern clients and its commitment to long-established relationships in the region.
Freshfields has a significant presence in the Middle East with offices in Abu Dhabi, Dubai, Saudi Arabia, and Bahrain. The firm has handled major transactions for key regional clients including the Abu Dhabi Investment Authority, Qatar Investment Authority, Kuwait Finance House, and Dubai’s DP World. The Middle East has become a growing source of revenue for Western law firms amid expanding sovereign wealth fund investments and increased efforts by Gulf states to attract international financial services since opening their markets.
The leaked email discussion also outlined potential steps for growing the legal tech spinout, including securing large corporate clients with substantial legal departments. Klingsberg cited one of the largest companies in the FTSE 100 as a target and expressed confidence in the firm’s offering relative to established legal tech competitors.
Freshfields’ Lab is seen as a strategic initiative within the firm to harness AI and technology to enhance legal services, reflecting broader trends in the industry toward tech-driven solutions. The apology follows heightened sensitivities over comments that could undermine trust with key clients in a critical region for global investment.