A&O Shearman commits $1.1 billion to AI, mostly through lawyers’ time

A&O Shearman’s $1.1 billion AI commitment is primarily a promise of lawyers’ time, not a disclosed cash budget. Under the five-year program announced November 5, 2026, every practice will devote at least 3% of its time to building specialist AI tools and services—a shift toward developing technology alongside delivering legal advice.

A commitment measured in expertise

The distinction is central to understanding the number. The firm says most of the investment’s value will come from practices allocating time to development within their own areas of law. It is committing professional effort to building services, rather than describing the entire sum as money to be spent on software, equipment or outside suppliers.

LawFuel’s November 10 account highlights the unresolved cash component: A&O Shearman has not disclosed how much of the $1.1 billion will be cash. The announcement also does not explain how the practice-level time allocation will count toward individual lawyers’ hours targets or partner compensation, an open question identified by LawFuel.

That structure limits the usefulness of a headline-dollar comparison with Kirkland & Ellis. In May, Kirkland pledged $500 million over three to four years, Bloomberg Law reported. A&O Shearman’s stated total is more than twice as large, but it covers five years and primarily represents development time. The totals alone do not establish which firm will spend more cash.

We want to have more upfront client conversations about how the work, the relationship and the economics can evolve with AI.

David Wakeling, A&O Shearman’s global head of AI

Specialist tools, not one generic system

The development plan puts each practice’s legal knowledge at the center. A&O Shearman says four years of testing showed greater value from embedding specialist expertise into AI systems that can be used across an area of law, rather than applying the same generic tools uniformly across the firm. That is the firm’s assessment, not an independently verified comparison.

Wakeling describes a client-specific process: lawyers contribute detailed proprietary knowledge, teams design solutions with clients, and the systems are adapted to clients’ positions on risk. The firm says lawyers, data scientists and developers are already delivering its ContractMatrix services across multiple jurisdictions, sometimes under new pricing structures.

The program builds on substantial internal use. In September 2026, 96% of partners and 93% of lawyers used the firm’s AI tools, according to A&O Shearman. They carried out more than 558,000 activities on ContractMatrix and Harvey legal workflow tools. Those figures describe adoption and activity, rather than a measured improvement in legal outcomes.

Billing changes, responsibility stays

The firm expects AI to make the billable hour less important, while stopping short of predicting its disappearance. It told Bloomberg Law that the share of income coming from fixed fees rose about 15% over the previous two years. That describes growth in the share, not a 15-percentage-point increase.

Its stated measures of success focus on clients: faster access to legal judgment and expertise, smoother legal and commercial processes, and greater cost efficiency. It also points to legal data and insights that can inform commercial decisions, alongside services it did not previously offer. These are the program’s intended benefits, not results established for the five-year commitment.

Responsibility for advice remains with people. A&O Shearman says a qualified lawyer always takes responsibility for the advice it gives, regardless of AI’s contribution. Its AI governance committees oversee deployment across practices, sectors and offices. The commitment therefore pairs a broader development role for lawyers with continuing responsibility for the legal work those systems help produce.