‘Data centre work is fossil fuel work’: Elite law firms targeted over AI boom

Law firms are facing growing scrutiny over their role in the booming data centre market, as climate campaigners increasingly link AI infrastructure work to fossil fuel expansion and rising emissions.

The latest report from Law Students for Climate Accountability (LSCA) argues that major firms advising on data centre projects are helping drive the environmental impact of the AI boom.

“Data centre work is fossil fuel work,” the report states.

Big Law cashes in

The AI infrastructure rush has become one of the hottest areas of transactional work in the Big Law market, with data centre deals regularly pulling in lawyers across finance, M&A, real estate, energy and regulatory practices.

The report singles out firms including Simpson Thacher and Latham & Watkins as major players in the sector.

Simpson Thacher ranked first globally for data centre transactions by volume in 2024, according to the report, which cited Infralogic league tables showing the firm had advised on more than $275 billion worth of deals since 2018.

The market is expected to keep expanding rapidly. McKinsey forecast last year that global demand for data centres would grow by roughly 22% annually until 2030, while BloombergNEF estimates capital expenditure by the world’s 14 largest listed data centre operators could approach $750 billion this year.

AI’s energy problem

The report points to data showing US data centres consumed more than 4% of the country’s electricity in 2024 and generated over 106 million metric tons of CO2 emissions, roughly triple 2018 levels.

The International Energy Agency expects global data centre electricity demand to more than double by 2030.

The report also argues that AI infrastructure places growing strain on water supplies and local energy grids because of the cooling and power demands required to operate large-scale AI systems.

The wider report found that 20 UK law firms facilitated roughly $706 billion in fossil fuel transactions between 2021 and 2025.

Six City firms - A&O Shearman, Clifford Chance, Freshfields, Hogan Lovells, Linklaters and Norton Rose Fulbright - each received an “F” grade from the organisation, which grades firms on an A to F scale.

BCLP was the highest-ranked UK firm in the report with a “C” grade.