Goldman Sachs, Morgan Stanley and Citi are asking a rather uncomfortable question of their outside lawyers: if AI is making legal work faster, why aren’t the bills getting smaller?
Power Points
Goldman Sachs, Morgan Stanley and Citigroup are pushing major law firms to demonstrate how AI efficiencies are being reflected in their legal bills.
Citi has begun asking firms bidding for work to explain their AI-related savings, while Morgan Stanley is moving much of its outside legal work toward competitive bidding and alternative fee arrangements.
The pressure goes directly to the BigLaw leverage model, where armies of associates traditionally generated large volumes of billable hours.
New LexisNexis research shows 94 per cent of lawyers now use AI for legal work and 55 per cent expect AI to change law firm billing.
The battle is shifting from whether lawyers should use AI to a much more interesting question: who gets the financial benefit?
For the past few years BigLaw has been enthusiastically telling anyone within PowerPoint range that artificial intelligence will transform legal practice and clients have been listening.
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