AI helps new US law firms use a split business structure

In short: More US law firms are using AI and a split-company structure to bring in outside funding and run legal work differently.

What's going on

A growing number of US law start-ups are adopting a setup called a management services organisation, or MSO. Think of it like splitting a restaurant into two businesses, one that cooks the food, and one that owns the kitchen tools and handles payroll and marketing.

In this model, the lawyer-owned firm does the legal casework. The MSO runs the back office, owns the technology, and can take investment from outsiders like private equity and venture funds. This matters because US ethics rules generally ban non-lawyers from owning shares in law firms.

The Financial Times reports that interest in MSOs surged in 2025, around the same time generative AI took off. Generative AI is the type of AI that can write and summarize text, like a fast assistant that drafts and reviews documents.

Newer firms are building around AI from day one. One example is Norm Law, a New York firm linked to legal tech company Norm AI. Norm Law says it uses AI “agents” (software helpers that can do specific tasks) in place of some junior lawyer work, aiming to match or beat traditional law firm costs for routine corporate tasks.

What to watch

Big firms are responding, not ignoring the shift. Kirkland and Ellis has set aside $500 million to build its own AI platform and it has a multi-year deal with Palantir to develop tech for advising private equity clients. More large firms are also considering MSO structures, partly to raise money for tech, and they may move away from billing by the hour for routine work and toward charging per project.

Source: Financial Times