The Scary Stakes of Anthropic’s IPO, Law Firm Collapses, and the U.S. Midterms

Is Anthropic really worth $2 trillion? I use their flagship product, the Claude chatbot, almost daily, and I’ve also used “Claude Code” to vibe code my websites www.yfgc.ai and www.lawyerloop.ai. These are good products and, to be honest, without them, I would need more humans to do the same work. The difference between what I pay Anthropic versus what I would pay a human is huge. Anthropic certainly deserves its vig (short for vigorish, https://en.wikipedia.org/wiki/Vigorish) on that.

But, of course, at this point, AI is a commodity for me. If Anthropic gets too expensive, meaning its vig gets too high, I’ll replace it with a lower-cost alternative. Tech companies think in terms of a moat/stickiness, i.e., making the switching costs so high that I’m locked in. But, alas, in the AI age that moat is limited, since AI is really good at figuring out how to transfer knowledge and data from one system to another (and you’d be crazy to store primary data with an AI chatbot, although I certainly expect that product in the future).

So what’s the play? It’s called monopoly or, more likely in the AI space at the moment, oligopoly. If the incumbents can limit competition to a few “friendly” companies and lock everyone out, then it’s highly likely that Anthropic and a few other companies will be worth trillions. It’s the Google playbook. Google has like 90% of search traffic and no one seems to care. Anthropic and OpenAI and maybe one or two other companies foresee themselves in the same position with AI and, in a super ironic twist, are getting there by claiming that only they can prevent their AI from being unsafe. And, of course, as I’ve written about before, the government is asleep at the wheel here and actually making things worse by believing that nonsense.

This goes beyond the pricing power that oligopoly confers on the incumbents, which will hit small businesses like mine especially hard. It’s also the fact that these AI companies are going to be the front door (and security guards) to the way so many people get information. That’s some insight your AI lawyer might never give you. And therein lies the scary risk of a $2 trillion IPO: a handful of companies with the market power to set prices and the power to control what information we see.

Also, every day I read about another lawsuit against Anthropic and the big labs. The most recent was by Elvis’s rights holders for copyright infringement. https://www.reuters.com/legal/legalindustry/anthropic-sued-over-elvis-songs-used-train-claude-2026-10-26/ I don’t expect it will end anytime soon and, as I have pointed out before, the company’s plan to manage legal risk seems to be to disclose it but not actually address it. I have not seen any serious moves by Anthropic, or the other big labs, to actually solve their legal problems. So it’s entirely possible that over time, a good part of that $2 trillion is going to make its way into lawyers’ pockets. Not a bad outcome, but clearly not what investors expect.

Weil-ly Legal Service Providers: Alas, none of that $2 trillion is going to go to one particular law firm, Weil, Gotshal & Manges, because they are going out of business (the technical term is “winding down”). That sucks. Weil was a NYC legal powerhouse with around 1,200 highly competent and highly compensated lawyers. Law firm collapses are not uncommon. Most of the time they can merge with other firms before facing the music, and sometimes there is criminality involved: https://abovethelaw.com/2026/10/before-weil-the-biggest-collapse-in-biglaw-history-ended-in-criminal-court/

Weil seems to have collapsed because key partners left and took their business with them, a merger fell apart, and nobody wanted to run what was left. No, it does not make a ton of sense, but neither do lots of things about these mega firms, including their astronomical fees. Be that as it may, the firm is finished. Here is how I see it: as the rich get richer and economic power consolidates, the money is concentrated in fewer, bigger clients, and there are fewer and fewer of them who can pay those astronomical fees for top-top-top-shelf legal services. There are just not enough of those clients to go around. So consolidation is going to happen, and if you don’t merge, you’re going out of business.

But the top of the market is still a small percentage of the overall market for legal services. We don’t think that anyone is ever going to come to Your Fractional General Counsel™ or lawyers in the LawyerLoop AI™ network for a $100M transaction or a $10M dispute. But I also don’t really need that business. We believe in faster and cheaper legal services, performed on volume. So what is interesting to me about the Weil dissolution is the reaction from the scores of neo/”AI-native” firms and new legal services providers, some of which are now valued at billions of dollars. The message to Weil lawyers, and lawyers at every other teetering firm: we’re growing and we want to help, so send your resume. I’m sure that is true. But are they really going to try to compete with the big traditional firms for the high-value business that requires a legion of Weil-caliber lawyers, at Weil compensation? Good for them (it does not affect my little business), but it’s a huge challenge to the economics of these new firms, because eventually, once the venture funding runs out, they’re going to need to charge for the very expensive lawyer and the possibly expensive AI. Your Fractional General Counsel™ just charges for the lawyer. It’s simple, and less Weil-ly.

The U.S. Mid-Terms Election. Horror movies are built on suspense, and this one is suspenseful. Democrats seem pretty confident, and the prediction markets seem to agree with them. I don’t read the tea leaves, but the social issues are powerful and, as I wrote about last time, Americans are voting against the establishment. It’s not one party versus the other. It’s candidate by candidate: who is going to stick it to the “establishment” more. So I see this as closer than most.

I don’t live in a swing district or have a vacation house in one, so I really don’t get a vote here. But because NYC shares a media market with some of the most competitive districts in the country (call it the Battle of the Burbs), I see the advertising, namely when I watch sports, which is the only linear TV I watch these days. The advertisements are endless and nasty. There is a reason for that: this is the first cycle in which the national parties can spend unlimited money in coordination with their candidates. That was National Republican Senatorial Committee v. FEC, 609 U.S. ___ (2026), in which J.D. Vance was a named plaintiff. Yes, the Vice President of the United States continued a lawsuit that sought to allow for more money in politics because, well, he knows the assignment. https://www.reuters.com/legal/government/us-supreme-court-decide-republican-challenge-campaign-spending-curbs-2026-06-30/

That little change in law might seem like an insignificant detail in how campaign finance works (which is itself a bit of a snooze), but it matters a lot. Here’s how it works. The government is allowed to cap how much individuals can give to candidates (because, well, corruption, since the lawmakers make the law). Right now that cap is $3,500 per election. The caps on giving to the parties (who don’t make law) are much, much higher: $44,300 a year to each national party committee, and each party has three of them (for Republicans, the RNC, NRSC, and NRCC). https://www.fec.gov/documents/5661/contribution-limits-chart-2025-2026.pdf Parties have long been able to spend unlimited amounts on their own, but only “independently” (meaning no talking to the candidate). What they couldn’t do was spend unlimited money hand in hand with the candidate’s campaign. Coordinated spending was capped, and for a House race in 2026 that cap was somewhere between $65,300 and $130,600. That was a thin but real attempt to keep the parties from becoming a pass-through: a donor who maxed out at $3,500 to a candidate could give more than twelve times that to the party, and the cap made sure only so much of it got funneled back into that candidate’s campaign. No more. Now the party can pool checks from thousands of maxed-out donors and pour them into whichever local race it wants, with the candidate calling the shots. Technically, donors can’t earmark party money for a particular candidate. But wink, wink. And while party donations are disclosed, once the money is pooled you have no idea whose money paid for the ad attacking your candidate. It’s all laundered through the national party committees. Basically, big donors can now spend far more directly into your local congressional race, and you really won’t know whose money it is. J.D. Vance put his name on that, somewhat proudly. And the six Supreme Court justices appointed by Republicans agreed with that. And when it comes to election law cases, like Louisiana v. Callais (2026) (gutting Section 2 of the Voting Rights Act), Rucho v. Common Cause (2019) (closing federal courts to partisan gerrymandering claims), Shelby County v. Holder (2013) (striking down VRA preclearance), and Citizens United v. FEC (2010) (unlimited independent corporate spending), the Republican-appointed justices almost always vote in unison in a way that always seems to make it more likely for Republicans to be elected. The rare exception was Watson v. RNC (2026), where Chief Justice Roberts and Justice Barrett joined the three liberal justices to let states count mail ballots postmarked by Election Day that arrive afterward. A rare victory, but it could help either party, so it doesn’t really matter. They understand the assignment.

It’s times like these that we need to remind well-meaning Democratic lawyers about how we got into this mess, so it informs how we’re going to get out, especially if things go well in these midterms. Back in 2016, President Obama nominated Merrick Garland to the Supreme Court. Senate Republicans refused to even hold hearings, and the nomination sat for 293 days until it expired in January 2017. It was Democratic timidity that got us into this mess. Now, hindsight is 20/20, but I actually don’t need hindsight here. There was a debate at the time on what to do. One option, was for the President to give the Senate a reasonable deadline and, if it failed to act, declare that the Senate had abdicated its advice-and-consent role, seat Garland anyway, and let the constitutional crisis play out. That would have, in my opinion, been the right thing to do. Instead, the decision makers made the wrong choice. These are smart people and good lawyers, but not even to force the issue is unforgivable. Always push. Personally, I always advise clients to take the more aggressive position, because the worst that happens is you lose. IMHO, it’s better to go down with a fight than to fold.

So now Democrats find themselves on the cusp of victory with the knowledge that unless they win big, there is a good chance that the Supreme Court will throw the election to the Republicans. Just a fact of life, and a structural disadvantage that is almost too big to get your head around. But it’s the result of bad decisions made 10 years ago and, with actual power within the grasp of the Democrats, let’s remember that. I’ll have more to say after the midterms, so stay tuned.

Keep thinking, keep building.

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.