Wall Street banks including Goldman Sachs, Morgan Stanley, and Citigroup are pushing legal advisers to cut fees, arguing AI reduces lawyer hours and clients should pay less.
IBM’s Chris McCloy: “the hourly rate basically punishes firms from using AI well” while alternative fee arrangements reward AI-driven efficiency. ~80% of work on Persuit platform uses AFAs rather than billable hours.
Despite pressure, hourly rates continue rising — US partners in low 4,000/hour. Growing fee structure options: fixed-fee, capped fees, subscription, collared fees.