Goldman Sachs and major banks demand AI-driven legal fee reductions

Major financial institutions, including Goldman Sachs, Morgan Stanley, and Citi, are increasingly pressuring outside law firms to reduce fees due to the efficiencies gained from artificial intelligence. Citi has reportedly requested that firms bidding for its business disclose specific savings achieved through AI implementation. Morgan Stanley is also moving toward competitive bidding processes with fixed fees.

While many companies focus on AI savings within software costs, such as CRMs or coding assistants, analysts suggest the more significant economic impact lies in professional services. Foundation Capital estimates that businesses spend approximately $4.6 trillion annually on salaries and services that could be reshaped by AI technology.