Kirkland & Ellis partners with Palantir for AI-driven private equity work

The world’s largest law firm by revenue, Kirkland & Ellis, has agreed to partner with tech giant Palantir to create an AI tool to use in advising private equity firms.

The US-based firm, which has a large City office, said the multi-year partnership will deploy technology to share the expertise of its leading partners with over a thousand of its lawyers who assist large private equity groups on investment opportunities.

The deal is one of many that Kirkland & Ellis plans to strike as part of a strategy it announced last week to invest £370m in developing its own custom-built AI platform, challenging competitors that rely on widely used third-party AI tools.

The partnership with Palantir will see the legal giant use AI to assist with tracking agreements private equity firms make with their investors, monitoring compliance, drafting side agreements – legally binding documents used as an add on to existing contracts – and documenting funds, according to the Financial Times.

As well as this, it will be used in advising on continuation vehicles, which are deals where a private equity firm effectively sells companies to itself, allowing investors to either cash out or reinvest their ownership stake into the new fund and provide it with resources to keep growing.

“It became really important for us to take all [our] institutional knowledge and senior partner judgment and embed that into an AI system,” Erica Berthou, a partner in Kirkland’s investment funds practice said.

Berthou said that there “is no doubt this will speed up and make the complex fundraising market system more efficient”.

However, the partnership may encourage a shift in clients’ billing expectations, potentially moving away from the billable hour model where clients equate hours spent on a project with the time it takes, Berthou added.

Palantir controversy

Palantir has also partnered with a number of pubic bodies in the UK, including the NHS, in a move that sparked criticism from the left-wing of UK politics, especially the Green Party, amid supposed concerns over giving third party contractors access to sensitive patient data. Palantir’s UK boss, Louis Mosley, has been vocal in rejecting the criticism, saying people are choosing “ideology over patient safety and patient outcomes.”

The company has been used by organisations including the Israel Defence Forces and in immigration raids in the US.

The Metropolitan police were also planning a £50m contract with the tech giant to support Scotland Yard with AI technology, but London mayor Sadiq Khan blocked the deal over concerns about the procurement process and nods from Khan’s office about the “ethics” of companies it procures from.

According to Kirkland & Ellis, Palantir will reportedly not have access to confidential client data.