Wall Street giants such as Goldman Sachs (GS.US) and Morgan Stanley (MS.US) are pressuring law firms to lower fees, aiming to share the efficiency dividends brought by AI.

According to reports from Zhihu Finance APP, Goldman Sachs (GS.US), Morgan Stanley (MS.US), and Citigroup (C.US) have informed law firms that, as artificial intelligence (AI) technology has made routine work significantly more efficient, the fees charged by law firms should also decrease.

Reportedly, Goldman Sachs has asked law firms how much cost AI has actually saved them and expects to share in the benefits of those efficiency gains. Morgan Stanley's chief legal officer, Eric Grossman, stated that the current compensation model for law firms is "extremely unstable."

Adam Meshel, global head of legal affairs for Citigroup, told the media that if lawyers can handle a matter in less time due to the assistance of AI, Citigroup expects that "the cost per transaction will drop significantly." The company has already started asking law firms to bid for related business and specify how much cost they have saved using AI. Adam Meshel stated that "a different working model" based on this approach may be established within a year.

It is worth noting that, in addition to law firms, professional service providers such as consulting companies and auditors, who are equally affected by AI, are also under pressure to pass cost savings on to clients. According to previous reports, McKinsey and other top management consulting firms are facing an AI-driven transformation of their fee structures. Clients are increasingly demanding that consulting fees be linked to quantifiable results such as cost reduction, profit improvement, or market share expansion, rather than being billed based on consultant hours. The backdrop for this transformation is the widespread adoption of AI. Consultants themselves now rely extensively on AI for data analysis and diagnostics, making "billable hours" as a pricing benchmark increasingly less meaningful.