A&O Shearman has committed $1.1 billion to artificial intelligence over five years, the Financial Times first reported on 5 November. The firm said the same day that it would invest the sum over the next five years, City AM and Law360 reported. Spread evenly, that is $220 million a year, or about 5.9% of the $3.7 billion City AM says the firm turned over in its recent financial year, by our arithmetic.
City AM reported the sterling figure as £816 million and said partners agreed to invest more than 5 per cent of the firm’s annual revenue over the next five years. Each of the firm’s practices will be expected to spend at least three per cent of its billable hours building “specialist” AI tools and services in its area of law, City AM reported.
Business Pill · Usage-Based Pricing
An evergreen Business Engineer explainer on usage-based pricing. It teaches the general idea only and does not discuss A&O Shearman or law firms.
The key insight: A&O Shearman has committed $1.1 billion to AI over five years, the firm said on 5 November according to City AM and Law360; spread evenly, that is $220 million a year, about 5.9% of the $3.7 billion City AM says the firm turned over in its recent financial year, by our arithmetic.
The firm said the commitment reflects “a firm-wide step change, enabled by AI, in how legal work is designed and delivered to clients and in how the firm trains its people,” according to City AM. It said that after testing different approaches over the last four years, AI “has the most meaningful impact” when its legal teams “embed deep product expertise into AI systems that can then be systemised across a particular area of law.”
“This significant investment signals where we intend to take the firm over the next decade,” global managing partner Hervé Ekué said, as quoted by City AM. David Wakeling, the firm’s global head of AI, said: “We want to have more upfront client conversations about how the work, the relationship and the economics can evolve with AI.”
The $1.1 billion commitment and the five-year period are the firm’s figures as reported by City AM and Law360; the $3.7 billion turnover is City AM’s figure. The $220 million a year and 5.9% are our arithmetic and assume an even split over five years.
How the Money Works
According to Resultsense’s summary of the FT report, most of the $1.1 billion is lawyers’ time rather than cash, and the FT report gives no split between hours and technology spend. Practice heads choose how to hit the 3% target, and the firm will track the hours, the summary says.
The same summary says AI usage has fed into bonus and performance assessments for associates, partners and business staff since this summer. Wakeling put revenue from ContractMatrix, the contract tool built with Harvey and Microsoft, in the “tens of millions of US dollars”, up ninefold on the previous 12 months, and fixed-fee income has risen 15% in two years, according to the summary.
The Rival Approach
City AM noted that A&O Shearman was one of the earliest law firms to adopt the technology, as legal AI firm Harvey’s first customer. It also pointed to Freshfields, which in April signed a multi-year agreement with Anthropic and rolled out Claude models to 5,700 users across 33 offices, reporting a 500 per cent increase in usage within six weeks.
As we read the reports, the firm is paying for AI mainly in lawyers’ time: City AM reports each practice must spend at least three per cent of its billable hours building AI tools, and Resultsense’s summary of the FT says most of the sum is time rather than cash.
As we read the summary, the firm is also changing incentives: AI usage has fed into bonus and performance assessments since this summer, according to Resultsense’s account of the FT report.
As we read the comparison City AM draws, law firms are taking different routes: A&O Shearman builds practice by practice, while Freshfields signed a multi-year agreement with Anthropic in April.
Hervé Ekué, global managing partner, A&O Shearman, as quoted by City AM, 5 November 2026
“This significant investment signals where we intend to take the firm over the next decade”
Three Implications
FOR THE ECONOMICS Resultsense’s summary of the FT report says fixed-fee income has risen 15% in two years, while most fees are still charged by the hour.
FOR THE PRODUCT Wakeling put ContractMatrix revenue in the “tens of millions of US dollars”, up ninefold on the previous 12 months, according to the summary.
FOR THE SCALE At an even pace, $220 million a year is about 5.9% of the firm’s $3.7 billion turnover as reported by City AM, by our arithmetic; the sources do not say how the sum is spread.
The framework says the rise of forward-deployed engineering shows that “technical capability has far outpaced organizational readiness”.
As we read it, A&O Shearman’s plan puts the work of applying AI inside each practice, with lawyers’ billable time as the budget. The framework predates the announcement and does not discuss A&O Shearman.
What Is Not Established
We could not read the FT or Reuters articles in full, and when we checked the firm’s website at 16:45 UTC we had not found a release, so the firm’s statements here are as City AM and Law360 reported them. The split between lawyers’ hours and cash spending, and whether the $1.1 billion is spread evenly across the five years, are not stated in the sources we read; the $220 million a year assumes an even split.
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A&O Shearman has put a number on building AI into its legal work: $1.1 billion over five years, paid largely in lawyers’ time according to the FT report as summarised by Resultsense, and equal to about 5.9% of a year’s turnover at an even pace, by our arithmetic.
A note on sourcing. The Financial Times first reported the commitment; we could not read the FT or Reuters articles in full. The firm’s statements and quotes are as reported by City AM, read in full, and Law360. Details on how the commitment is paid for are from Resultsense’s summary of the FT report. The per-year figure and the share of turnover are our arithmetic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
