Why the CEO of an elite law firm sees AI driving more deals

2026-07-17 · Source: Semafor · Field: Legal & Regulatory — Legal Technology (LegalTech), Corporate Law & Business Legal Services · Depth: Intermediate, extended

Summary

Hogan Lovells CEO Miguel Zaldivar asserts that Artificial Intelligence is a primary driver for consolidation within the legal industry, exemplified by his firm's recent merger with Cadwalader, Wickersham & Taft, creating a \$3.6 billion global entity with 3,000 lawyers. Zaldivar believes AI will fundamentally alter the profession's cost structure, elevating technology expenses to rival or surpass personnel costs, making it challenging for smaller firms, such as those under \$1.2 billion, to compete with the substantial AI investments of larger players like Kirkland & Ellis's \$500 million commitment. He emphasizes that firms must maintain an "elite proposition" and enhance efficiency to outperform in-house legal departments. Additionally, AI is expected to accelerate the identification of high-performing legal talent, as noted by Cooley CEO Rachel Proffitt, further segmenting the market.

Key takeaway

For legal executives considering strategic growth or competitive positioning, you must recognize AI's transformative impact on firm economics. Your firm's ability to invest significantly in AI technology will increasingly dictate its market viability and talent retention. Prioritize mergers or strategic partnerships to achieve the necessary scale for AI adoption, ensuring you can deliver specialized, data-driven services more efficiently than in-house departments. Failure to adapt risks being outmaneuvered by larger, tech-forward competitors.

Key insights

AI is forcing legal industry consolidation by escalating tech costs and demanding scale for competitive advantage.

Principles

• AI elevates technology costs in legal.
• Scale enables competitive AI investment.
• Focus on elite, efficient legal services.

In practice

• Assess firm's AI investment capacity.
• Enhance efficiency with data-driven tools.
• Focus on high-value, specialized legal work.

Topics

• Legal Industry
• Artificial Intelligence
• Mergers & Acquisitions
• Law Firm Management
• Legal Technology
• Talent Management

Best for: Investor, Entrepreneur, Legal Professional, Executive, Consultant

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Editorial summary, takeaway, and curation by AIssential. Original article published by Semafor.