Freshfields email leak takes fresh turn with apology over Middle East comments

Freshfields’ leaked email chain has taken another turn. Last week, the story was about senior partners discussing whether the firm’s legal tech and AI unit could be spun out, opened to outside investors and potentially turned into a business “worth billions”.

Now the firm has apologised for another part of that exchange which included a comment suggesting “Middle Eastern sovereign wealth money” would probably not fit the type of investor the partners had in mind.

Partner Ethan Klingsberg had suggested approaching “sophisticated investors that are respected by the rest of the investor community for their leadership”.

The exchange was between Klingsberg, co-head of US corporate, and global managing partner Alan Mason, and was accidentally sent to a large internal distribution list before being recalled. Screenshots had already been taken and passed to the Financial Times, which reported the story.

Freshfields said on Monday that it apologised “unreservedly” for the comment and stressed that it did not reflect the views of the firm or those involved in the exchange.

Freshfields is deeply embedded in the Middle East. The firm counts some of the region’s biggest sovereign wealth funds among its clients, including Abu Dhabi’s ADIA, Qatar’s QIA, Saudi Arabia’s PIF, Bahrain’s Mumtalakat and Abu Dhabi’s Mubadala.

Earlier this year, Klingsberg led the Freshfields team that advised a Mubadala-led consortium on the $6.2 billion take-private of Clear Channel Outdoor in the US - another major deal to add to its growing reputation as the top UK-headquartered firm in New York’s prestigious M&A market. Last year, it acted for Bahrain’s Mumtalakat on its deal to take full control of McLaren.

It has offices in Abu Dhabi, Dubai, Riyadh and Bahrain, and only last year opened its own Riyadh office after ending a 16-year association with a local firm.

If the original leak was mostly interesting because of what it revealed about a major law firm’s thinking on how to monetise AI and its views on external capital, the follow-up is certainly more awkward reputationally.

In a statement published by the FT, the firm said: “We hold our clients across the Middle East in the highest regard and deeply value the longstanding relationships and trust we have built in the region", adding that it remains “firmly committed” to the Middle East.