Freshfields Apologises After Leaked Emails Excluded Middle Eastern Investors

Freshfields has apologised unreservedly for a leaked email comment suggesting Middle Eastern sovereign wealth money would "probably" be ruled out as investors in a planned spin-off of the firm's legal tech arm.

The email chain, seen by the Financial Times, exposed internal discussions about spinning off Freshfields Lab, the firm's in-house legal technology division, into a standalone business potentially worth billions.

What exactly was said?

Ethan Klingsberg, co-head of Freshfields' US corporate and M&A team, reportedly wrote that the firm would approach "sophisticated investors that are respected by the rest of the investor community for their leadership". He added that this "probably" ruled out "Middle Eastern sovereign wealth money".

The exchange was between Klingsberg and Freshfields' global managing partner, Alan Mason. Mason had outlined the spin-off plans and the pair discussed outside investment and a possible multibillion-dollar valuation. Mason had also contacted two Wall Street banks about the proposal.

The takeaway: a candid investor-screening remark, made privately, is now the firm's most public reputational problem.

How did the emails leak?

Mason accidentally forwarded the chain to a large internal distribution list named "$Freshfields All". The firm recalled the email swiftly. It was too late. Some recipients had already taken screenshots, and the exchange reached the Financial Times.

An internal planning document became a public relations crisis in a single misdirected click.

What did Freshfields say in response?

In a statement issued on Monday, Freshfields moved to distance itself from Klingsberg's remark. The firm said the comment "does not reflect the position or beliefs of the firm or those participating in that email chain".

The firm's full statement, as reported by the FT, read: "We apologise unreservedly for a comment made about Middle Eastern sovereign wealth investors… the comment does not reflect the position or beliefs of the firm or those participating in that email exchange, and we sincerely regret the offence caused."

Freshfields continued: "We hold our clients across the Middle East in the highest regard and deeply value the longstanding relationships and trust we have built in the region. We have enormous respect for the discerning leadership and global impact of our clients and remain firmly committed to the region."

The message is clear: the firm is treating the region's investors as clients it cannot afford to lose.

Why does this matter for the firm's Middle East practice?

Freshfields maintains an established presence across the Gulf. The firm operates offices in Abu Dhabi, Bahrain, Dubai and Riyadh, according to the Legal Cheek Firms Most List 2027.

For practitioners, the practical stakes are straightforward. Sovereign wealth funds in the Gulf are among the world's largest institutional investors and a significant client base for elite international firms. A senior M&A partner's written suggestion that such money fails a "sophistication" test cuts directly against the client relationships the firm's four regional offices exist to serve.

For any firm pursuing external investment in a tech spin-off, the episode also shows how deal deliberations can surface without warning. Investor criteria expressed in internal emails may read very differently when published, particularly when they appear to disparage a client constituency.

The bottom line: Freshfields has apologised, but the comment is now on the record alongside the spin-off plans it was meant to keep private.