Kirkland $500 Million AI Bid Highlights Access-to-Justice Issues

Let the Big Law AI arms race begin. Kirkland & Ellis, America’s largest and most profitable law firm, announced last week that it’s investing $500 million to build its own artificial intelligence platform. Kirkland’s bet is that proprietary AI will give it an edge over rivals stuck with off-the-shelf tools such as Harvey and Legora.

Expect a handful of Kirkland’s wealthy peers to make similar bets. But for most US law firms, the AI race is a contest they won’t win because it’s a contest they’re effectively prohibited from entering.

Law firms can’t raise outside capital the way other businesses do. Legal ethics rules—specifically Rule 5.4 of the Model Rules of Professional Conduct—ban firms from raising equity financing or sharing fees with non-lawyers. Those rules explain why not a single law firm, not even Kirkland & Ellis with its $10 billion in annual revenue, is publicly traded on any stock exchange.

No surprise, then, that Kirkland said it would fund its AI platform from its own revenues rather than through a third-party investment. Rule 5.4 cuts law firms off from the capital markets. In nearly every other industry, robust capital markets allow small upstarts to vie with large-scale incumbents, producing healthy competition that lowers prices and improves quality.

While Rule 5.4 hurts all law firms, it gives a comparative advantage to larger, wealthier law firms like Kirkland that can self-finance long-term investments. And it gives a courtroom advantage to the larger, wealthier businesses that can afford those law firms’ rates. The stakes are about nothing less than access to justice: who gets legal representation, and who is left standing outside the courthouse gates.

Our civil justice system has long been plagued by an affordability and access crisis. According to New York University Law School, as many as 90% of Americans show up to state court without a lawyer. Even those individuals and small businesses who can afford a lawyer are often outmatched by better-resourced litigation opponents. The promise of “Equal Justice Under Law,” emblazoned across the façade of the US Supreme Court, is out of reach for too many.

Promising market solutions have recently emerged. The capital restrictions that prevent firms from matching Kirkland’s bet are the same ones these emerging reforms are designed to dismantle.

The Arizona Supreme Court in 2020 eliminated its version of Rule 5.4 allowing for alternative business structures, or ABS, where law firms can accept equity investment from non-lawyers. The court explained that the program was “rooted in the idea that entrepreneurial lawyers and nonlawyers would pilot a range of different business forms” to improve access to justice. Stanford researchers concluded in 2025 that individual consumers and small businesses are the prime beneficiaries of an ABS framework. ABS structures would allow firms to obtain third-party capital to invest in AI and other projects.

A second innovation is the managed services organization, or MSO, which permits law firms to subcontract non-legal services and receive cash investments in ways that are consistent with Rule 5.4. Some firms, including McDermott Will & Emery, are exploring partnerships with MSOs to obtain third-party capital infusions they can deploy toward AI and other long-term investments. Certain MSOs, like ours at Certum Group, maintain full-stack development teams that are already building proprietary AI and other technological tools, providing smaller firms with cutting-edge capabilities that were traditionally available only to the largest firms.

And then there is third-party litigation finance, where outside investors fund the fees and costs of litigation in exchange for a share of any recovery. Third-party funding enables plaintiffs and their lawyers to prosecute meritorious cases regardless of their resources. Funders also can provide non-recourse working capital to claimholders, allowing them to better compete not just in the courthouse but in the marketplace, as Suneal Bedi of Indiana University and I recently argued in the Southern California Law Review.

Each of these innovations rests on the same premise: Market forces can bring third-party capital to law firms and their clients, enabling the “have nots” to obtain better results. They allow firms to invest in their clients and in themselves, equipping both to succeed in the courtroom and the market square.

These innovations also share something else: sustained opposition. California, Colorado, and Illinois advancing bills to limit the ability of ABSs and MSOs to serve those states’ citizens. Third-party litigation finance has long been a target of some federal and state lawmakers. A failed provision in last year’s federal reconciliation bill would have imposed an industry-crippling excise tax of more than 40% on litigation funding returns.

Critics argue that third-party investment will undermine attorney independence. This is an important concern. But as Arizona recognized when it eliminated Rule 5.4, other professional responsibility rules already preserve that independence. Legal scholarship, including work I have done with Brian Fitzpatrick of Vanderbilt Law School, suggests that third-party finance will improve rather than undermine the attorney-client relationship.

The cost of legal prohibitions on third-party finance is borne by the litigant who can’t find a lawyer willing to take a meritorious case because no firm can afford the risk. It’s borne by the small business that settles a legitimate claim because it cannot match its opponent’s litigation budget. And it’s borne by the party who shows up to an eviction hearing, a custody dispute, or a debt collection action without counsel—facing an adversary who has it.

Kirkland’s announcement is a preview of where the legal market is headed: A world where only the largest firms can self-finance the technology that will define competitive advantage for a generation. AI and third-party investment can close that gap and expand access to justice—but only if policymakers let them.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

William C. Marra is a director at Certum Group, where he leads the company’s litigation finance business.

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