Law firms are increasingly expanding their services beyond classical Chapter 11 bankruptcies to offer holistic support, including restructuring, refinancing, and M&A. This trend has created an "arms race" among top firms, with a focus on liability management to help companies restructure debt and raise capital to avoid formal insolvency proceedings.
Kirkland & Ellis, the world's highest-grossing law firm, has solidified its position as a market leader in liability management, leveraging its strengths in private equity and traditional restructuring. Since the start of 2024, Kirkland & Ellis has been hired as debtor's counsel in 22 large bankruptcies, more than any other firm. The firm has also represented major clients such as Altice USA, Warner Bros Discovery, and luxury retailer Saks in multi-billion dollar liability management situations. Kirkland & Ellis has also committed $500 million to develop its own AI platform and partnered with Palantir for private equity fundraising technology.
Latham & Watkins is a close contender, securing 10 debtor's counsel assignments this year, including blockbuster Chapter 11 cases for semiconductor maker Wolfspeed, Office Properties Income Trust, and solar power producer Pine Gate Renewables. Latham also advised Goldman Sachs and TPG on a loan facility for Altice USA and represented juice maker Tropicana in its debt restructuring. Other firms like Davis Polk, Gibson Dunn, and Akin Gump are also growing their practices by representing hedge funds and asset managers in deals with debtor companies. Law firms are increasingly seeing themselves as strategic advisors, offering integrated practices and market intelligence to clients across their long-term investments.
Separately, the legal industry is seeing an embrace of AI, with Quinn Emanuel using AI to rapidly identify weak claims in a case, enabling a detailed motion within 24 hours. Spending on legal tech is projected to increase, with corporate legal departments expected to double their spending by 2028. Innovative financial structures like "management services organizations" (MSOs) are emerging in the US, allowing law firms to attract capital from non-lawyer investors by separating legal casework from back-office functions and technology. This enables the growth of "AI-native" and "platform" firms, with MSOs owning intellectual property and running administrative operations while lawyer-owned entities handle legal work. This structure circumvents ethics rules that typically bar non-lawyer shareholders in US law firms.
