Wall Street turns to AI to slash legal fees: Beyond saving man-hours, firms are also lowering their fee quotes.

Beating AI News (Insight) | Goldman Sachs, Morgan Stanley, and Citigroup are now requiring major U.S. law firms to directly incorporate efficiency gains from AI into their service quotes. When billing by the hour, AI typically cuts 10 hours of work to just 4, which would naturally lower bills. But the banks are pushing for deeper price cuts: they want firms to calculate AI-related cost savings upfront and submit lower total prices accordingly. Citigroup has already asked law firms to bid on projects, explicitly stating how much AI would reduce their costs. Morgan Stanley plans to source most external legal work via bidding by the end of this year, and adopt more fixed-price arrangements. Goldman Sachs is also pressing law firms to quantify exactly how much AI has improved operational efficiency. This move directly impacts the long-standing revenue model of big law firms, which relies on "hours worked × hourly rate". While AI can accelerate tasks like research, contract review, and litigation document retrieval, hourly rates at top U.S. law firms continue to rise. Wall Street now aims to deduct the cost savings from AI directly from legal fees.