A&O Shearman ramps up AI push with five-year plan it says is worth $1.1bn

A&O Shearman has announced an AI investment plan it says is worth $1.1 billion over five years.

The firm said the majority of the investment will come from each practice devoting at least 3% of its time to building specialist AI tools and services, with the aim of embedding AI more deeply into how legal work is delivered.

The firm did not respond by the time of publication to questions about how much of the headline investment figure will be spent in cash.

Early mover

A&O Shearman has been one of the earliest major law firms to push heavily into generative AI.

It began experimenting with Harvey in 2022 and later became the legal AI company’s first major UK law firm customer. The firm has also built its own AI products, including contract negotiation tool ContractMatrix, which it developed with Microsoft and Harvey.

Much of that work now sits within the firm's Markets Innovation Group, known internally as MIG, a team of lawyers, developers and innovation specialists led by partner David Wakeling, the firm’s global head of AI.

A&O Shearman said usage of ContractMatrix has increased significantly, while 96% of partners and 93% of lawyers used its AI tools in September.

Global managing partner Hervé Ekué said: “This significant investment signals where we intend to take the firm over the next decade.”

“AI lets us bring an enhanced skillset to our clients’ work, however complex, on a global scale and in a way that wasn’t possible before,” he added.

“The firm that leads will combine exceptional legal judgment with the speed and scale to apply it consistently, anywhere in the world. We intend to be that firm and that is what this investment accelerates.”

Big Law AI race

The announcement comes as major firms step up spending on AI.

Kirkland & Ellis said earlier this year that it plans to invest around $500 million in AI, before announcing a partnership with Palantir to build its own technology platform for fund formation work.

Kirkland’s investment is understood to be coming out of its vast revenues, which hit $10 billion last year. A&O Shearman posted revenue of $3.7 billion in its latest financial year, with average equity partner profits of $2.9 million.

US firm Goodwin is investing around $25 million a year in buying and developing AI technology.

Latham & Watkins has meanwhile invested in servers containing Nvidia GPUs, allowing the firm to run and customise AI models within its own systems.