June 5, 2026

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

Subscribe to Our Newsletter

Newsletter


William Marra

|

June 5, 2026

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 was originally published on June 4, 2026, on Bloomberg Law and is available here.


Copyright 2026 Bloomberg Industry Group, Inc. (800-372-1033)

www.bloombergindustry.com. Reproduced with permission. 


Certum Group Can Help

Get in touch to start discussing options.

Recent Content

By Patrick Dempsey • October 13, 2026
This is the fourth post in Certum Group's seven-part series bringing our Trade Secret Litigation Playbook to the blog. It draws on Part IV of the Playbook, What Your Case Is Worth. Read or download the full Playbook here . Ask a business owner what a trade secret case is worth, and the first instinct is almost always the same: what did we lose? It is the intuitive measure, and it is usually the smallest one on the table. Trade secret law rewards claim holders who think about damages more expansively than "our lost sales," and the gap between the intuitive number and the recoverable number is often enormous. There are four measures worth understanding, and lost profits is only the first. Lost profits: what you would have earned The revenue you would have earned absent the misappropriation — contracts you would have signed, renewals you would have held, pricing power you could have sustained. Lost profits require you to prove causation between the taking and the foregone revenue, which is where most of the work goes. It is a real number, but it is anchored to your own historical performance, and that ceiling is frequently lower than what the case is actually worth. Unjust enrichment: what the defendant gained This is usually the largest measure, and by a wide margin. Unjust enrichment captures everything the defendant gained by taking the shortcut: the R&D and engineering it avoided, the head-start value of reaching the market faster than an independent developer could have, the savings and margins it captured, and — in the strongest cases — disgorgement of the revenue its product earned because it was built on your secret. In software, manufacturing, and pharmaceutical cases, the avoided-time-to-market term alone can dwarf your lost profits, because it measures the defendant's entire economic benefit rather than your specific loss. Reasonable royalty: the floor An objective measure grounded in what the defendant would have paid to license the secret in an arm's-length deal. It is typically the smallest of the three, but it functions as a floor when lost profits are speculative and unjust enrichment is contested. Sophisticated claim holders do not treat it as a fallback; they treat it as an independent anchor that constrains how small the number can reasonably be. Exemplary damages and fees: what willful conduct adds If the misappropriation was willful and malicious, the DTSA and most state statutes allow enhanced damages of up to twice the compensatory award, plus attorney's fees. 1 Willfulness is not a rhetorical flourish; it is a doubling, sometimes a tripling, of the core recovery. And the evidence that establishes it — an internal email, a board slide, a pattern of ignored warnings — is exactly the kind of material that discovery tends to surface. That is why intent belongs at the center of the case from day one. The Versata signal If you want a live illustration of how large the gap can be, look at the Federal Circuit's 2026 decision in Versata Software v. Ford. The trial court had tried to cap Versata's trade secret damages at a licensing-based model — essentially, what Ford would have paid — and zeroed out the rest as an undeserved "windfall." The Federal Circuit disagreed, holding that the DTSA's text expressly allows recovery of the unjust enrichment the defendant captured, even when that figure is far larger than any license fee. The message to corporate defendants is blunt: if you misappropriate rather than license, you assume the risk that the damages will dwarf what you could have paid. The message to claim holders is just as clear — the ceiling on your case is often much higher than your accountant's first estimate. Why this matters before you file Claim holders who engage a damages expert early consistently do better — not because the expert changes the facts, but because an early damages view changes three downstream decisions. It changes which counsel you hire, because the firms built for a $50 million case are different from the firms built for a $5 million case. It changes your fee structure, because a firm weighing a contingency needs a damages view to price it. And it changes settlement posture, because a plaintiff who can articulate a well-supported range anchors the negotiation, while one who cannot is negotiating against the defendant's number. The defendant almost always knows what you might get at trial. The only question is whether you do. Go deeper with the Playbook. This post covers one piece of a much larger picture. For the full framework — what the law requires, what a strong pre-filing case looks like, how damages experts value these matters, how counsel fee structures change your economics, and how litigation finance fits in — read Certum Group's Trade Secret Litigation Playbook , our field guide for business owners and the counsel who advise them: certumgroup.com/the-trade-secret-playbook . And if you are evaluating a live dispute — or simply want to pressure-test what a matter is worth and how it might be funded — get in touch. A confidential conversation with Certum is free and carries no obligation, whether or not you ultimately seek funding. Reach us at certumgroup.com/contact-us . Sources 1. 18 U.S.C. Section 1836(b)(3)(B) (permitting recovery of unjust enrichment not addressed in computing actual loss); Section 1836(b)(3)(C)-(D) (exemplary damages up to twice the compensatory award, and attorney's fees, for willful and malicious misappropriation).
By Patrick Dempsey • September 29, 2026
This is the third post in Certum Group's seven-part series bringing our Trade Secret Litigation Playbook to the blog. It draws on Part III of the Playbook, Before You File. Read or download the full Playbook here . The call usually comes from a sales leader, a head of engineering, or a chief of staff, and it usually starts the same way: "We think someone took X, and we think they took it to Y." What happens in the next three days is disproportionately important. The most expensive mistake in trade secret practice is waiting — every week that passes lets the defendant commercialize your advantage, and worse, lets the evidence quietly disappear. Slack messages, badge records, and git histories often sit behind auto-delete settings as short as ninety days. So before you do anything else, move to preserve. Here is what good early triage looks like. Issue a litigation hold — in writing, within 24 hours A written instruction to preserve any document, chat, email, calendar, or file relating to the possible misappropriation, sent to the full legal, HR, IT, and leadership teams. It should be specific enough to be useful, broad enough to catch the unexpected, and documented enough that you can produce it later. This is the single most important thing you can do in the first day. Lock down forensic images — and don't let internal IT do it Laptops, phones, and company devices belonging to any suspected party should be forensically imaged by an outside forensics firm, not wiped or "checked" by internal IT. Chain of custody matters, and internal teams generally cannot testify to it at trial. The right instinct is to image broadly and review narrowly: you can always decline to look at a device you preserved, but you can never go back for one that was reissued, wiped, or sold. And don't forget the non-obvious sources — personal cloud drives, USB connection histories, printer spooler logs, and screen-capture utilities are often where the decisive evidence actually lives. Extend retention on cloud and platform logs Have IT extend retention on the relevant accounts and export the log data — access logs, download histories, egress traffic — before anything rolls off. The forensic story of who did what, when, and with which file is usually more persuasive to a judge than any human witness. A download at 11:47 p.m. the night before a resignation is powerful evidence because of what the timing means. Do not tip off the adversary Resist the urge to confront the suspected employee, their new employer, or their counsel. Confrontation at this stage tends to accelerate deletion and pull communications behind privilege claims. A carefully timed cease-and-desist letter, sent after preservation is secure, is a very different move — and a far more effective one. Investigate under privilege Any investigation you run should be conducted under attorney direction, so that the work product is privileged and your witness interviews do not become admissions used against you later. This is not about secrecy for its own sake. It is about making sure the investigation helps your case rather than becoming evidence in it. Consider — but do not rush — the early public filing Ex parte seizure orders, temporary restraining orders, and preliminary injunctions all have their place, and an early injunction can be the single most valuable outcome in the whole case. 1 But these motions require a level of evidentiary support you rarely have on day three. It is almost always better to spend a week building the record than to file fast and lose the first motion, which hands the defendant a narrative and hands you a hole to climb out of. The triage checklist If you want a single page to keep by the phone, it looks like this: litigation hold issued in writing within 24 hours; outside forensics firm retained and imaging scheduled; cloud and platform log retention extended; a list of suspected individuals plus their managers and peers; a list of the specific secrets that may have been taken; copies of every NDA, employment agreement, and IP assignment covering them; a review of the last 90 days of their calendar for unusual patterns; and outside trade secret counsel engaged under privilege. Do the first 72 hours well and you preserve every option that follows — injunction, damages, settlement leverage. Do them poorly and you may spend the next two years litigating around evidence you could have saved in an afternoon. If you are in the opening days of a matter and want a fast, confidential read on what to do now versus later, that is exactly the conversation we have most often. Go deeper with the Playbook. This post covers one piece of a much larger picture. For the full framework — what the law requires, what a strong pre-filing case looks like, how damages experts value these matters, how counsel fee structures change your economics, and how litigation finance fits in — read Certum Group's Trade Secret Litigation Playbook , our field guide for business owners and the counsel who advise them: certumgroup.com/the-trade-secret-playbook . And if you are evaluating a live dispute — or simply want to pressure-test what a matter is worth and how it might be funded — get in touch. A confidential conversation with Certum is free and carries no obligation, whether or not you ultimately seek funding. Reach us at certumgroup.com/contact-us . Sources 1. The ex parte seizure procedure is authorized by the Defend Trade Secrets Act, 18 U.S.C. Section 1836(b)(2), and is available only in extraordinary circumstances.
By Patrick Dempsey • September 15, 2026
This is the second post in Certum Group's seven-part series bringing our Trade Secret Litigation Playbook to the blog. It draws on Part II of the Playbook, Trade Secret Law in Plain English. Read or download the full Playbook here . Here is a statistic that surprises most executives: in federal trade secret cases that reach a verdict, plaintiffs win roughly 84% of the time. 1 That is dramatically better than the plaintiff win rate in commercial litigation generally. It does not mean every case is easy — the cases strong enough to reach a jury are a selected group — but it tells you something important about what happens when a well-built trade secret claim gets in front of a fact-finder: courts tend to enforce the rights the statute was designed to protect. So why do good claims still fail? Usually not at trial. They fail earlier, on assumptions the claim holder never stopped to test. In more than a decade of evaluating these matters, the same handful of misconceptions come up again and again. Here are six worth clearing up before they cost you a case. Myth 1: "It's only a trade secret if we stamped it CONFIDENTIAL." Marking helps, but it is not required. What matters is whether your overall secrecy program is reasonable under the circumstances — a holistic look at contractual, physical, and technical controls. A perfect stamp on an otherwise open system is worth less than a coherent program with a few gaps. Myth 2: "If part of it is public, none of it is protected." Courts routinely protect a combination of individually public facts when the particular combination delivers competitive advantage. The recipe can be assembled from ingredients anyone can buy. What you protect is the assembly. Myth 3: "Our employees signed NDAs, so we're covered." NDAs are a foundation, not a program. The full set of reasonable measures a serious claim holder is expected to have includes access controls, badging, egress monitoring, exit procedures, and technical segmentation. An NDA in the drawer and nothing behind it is exactly the gap a well-resourced defendant will press on first. Myth 4: "We didn't sue the last person who left, so it's too late now." Trade secret protection is evaluated case by case. Declining to act on one departure does not forfeit your rights as to the next one. Every matter stands on its own facts. Myth 5: "We're too small to enforce against a big company." This one gets the economics backwards. A well-funded claim against a large, solvent defendant is often easier to win — and easier to collect — than a disorganized claim against a small one. Resources can be added to a strong case; facts cannot be added to a weak one. The right capital partner exists precisely so that a smaller plaintiff can stand toe-to-toe with a much larger adversary and neutralize the outspend-them tactics that used to decide these fights. Myth 6: "It's just know-how — courts don't protect that." Courts protect integrated know-how constantly. The question is never whether know-how is capable of protection; it is whether you can identify it with enough particularity to describe what was taken. 2 That is the single most consequential early decision in the case, and it is the one most claim holders do not realize they are making when they plead "our proprietary software" instead of the specific, described combinations that actually give them an edge. The through-line Notice what these myths have in common: each one leads a claim holder to under-invest in a case that the numbers say is very winnable. The 84% figure is not a promise. It is an invitation to take the early work seriously — the secrecy program, the identification, the evidence — because that work is what turns a strong set of facts into a strong case. Get those right, and the law is on your side more often than in almost any other kind of commercial dispute. Go deeper with the Playbook. This post covers one piece of a much larger picture. For the full framework — what the law requires, what a strong pre-filing case looks like, how damages experts value these matters, how counsel fee structures change your economics, and how litigation finance fits in — read Certum Group's Trade Secret Litigation Playbook , our field guide for business owners and the counsel who advise them: certumgroup.com/the-trade-secret-playbook . And if you are evaluating a live dispute — or simply want to pressure-test what a matter is worth and how it might be funded — get in touch. A confidential conversation with Certum is free and carries no obligation, whether or not you ultimately seek funding. Reach us at certumgroup.com/contact-us . Sources 1. Stout, Trends in Trade Secret Litigation (2024), reporting an approximately 84% plaintiff-favorable outcome rate across 271 federal trade secret cases reaching a verdict since 2017. 2. Both the federal Defend Trade Secrets Act (18 U.S.C. Section 1836) and the state Uniform Trade Secrets Act define a trade secret as information that derives independent economic value from not being generally known or readily ascertainable, and that is the subject of reasonable measures to keep it secret.