Wall Street banks are pushing large law firms to cut fees, arguing that the business model that has enriched top lawyers for decades is not sustainable in an era of AI.

Morgan Stanley and Citigroup have told major law firms they want to set up new payment arrangements that would save them money, the banks’ in-house lawyers told the FT…

“If the number of hours they’re working on a matter has come down because of AI . . . our expectation is for costs to come down significantly per transaction,” Adam Meshel, global head of legal at Citigroup, told the FT.

He said the bank had started asking law firms to bid for work, explaining during the bidding process how much they were saving using AI…

The ability to complete tasks more quickly could mark “a fundamental altering of the revenue foundation for these mega firms”, he said.

Here is the full FT piece by Kaye Wiggins and Joshua Franklin.  I have been predicting exactly this in many of my talks…

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