Kirkland & Ellis Signs Multi-Year Deal with Palantir to Co-Develop AI Tools for Private Equity
Claire Weston
Kirkland & Ellis, the world's largest law firm, signed a multi-year deal with Palantir to co-develop AI tools for private-equity fundraising — part of a $500 million-plus AI platform plan, the biggest disclosed AI bet in legal history.
What will this AI tool actually do?
It covers the full workflow of PE fund formation: drafting fund documents, producing side letters — bespoke terms negotiated between a fund and its largest investors — tracking investor agreements, and monitoring compliance.
It can also handle continuation-vehicle deals — transactions where a PE firm sells a portfolio company to a new fund it manages itself. These generate some of the most complex paperwork in the business.
This means → Kirkland wants to encode decades of senior-partner judgment into a system accessible to over a thousand lawyers — scaling one expert brain across an entire firm.
Why is Kirkland spending $500 million on this?
The firm will spend over $100 million on AI this year alone — the highest single-year figure any law firm has disclosed. The total plan exceeds $500 million.
Last year Kirkland advised on fund formations totalling nearly $500 billion, for clients including Blackstone, Thoma Bravo, and EQT.
In plain terms = fund-formation documents are massive in volume and highly repetitive — the ideal AI use case. If billing shifts from hourly rates to flat project fees, clients pay less per deal while Kirkland captures the efficiency gain.
Why Palantir — and what about the controversy?
Kirkland evaluated multiple tech firms and chose Palantir for its data-security capabilities, long track record, and talent bench.
Palantir has drawn political fire for helping U.S. immigration authorities track deportation operations, and CEO Alex Karp's public support for Trump-era immigration policies has triggered scrutiny in the UK Parliament.
Partner Erica Berthou said Palantir will not access client confidential data. She acknowledged the negative coverage but said the decision rested on technical capability.
"Build and keep" vs. "build and sell" — two diverging AI strategies for law firms?
Kirkland chose a closed path: the tools Palantir builds for it cannot be sold to rival firms. AI capability becomes a proprietary moat.
Competitors are going the opposite way: A&O Shearman has developed fund-formation tools it intends to sell externally; Freshfields signed a deal with Anthropic in April to help build AI tools saleable to competing firms.
This reflects a core trade-off in legal AI — a closed path locks in differentiation but cannot spread development costs through licensing; an open path recoups investment but erases the advantage once the tool proliferates.
Content is for reference only, not financial advice.