**[Wall Street Starts Using AI to Cut Legal Fees: Saving Work Hours Isn't Enough, Quotes Must Drop Too]** Beating AI Newsflash: Goldman Sachs, Morgan Stanley, and Citigroup have begun asking major U.S. law firms to directly factor AI-driven efficiency gains into their pricing. When charging by the hour, AI reduces 10 hours of work to 4 hours, which naturally lowers the bill. But now banks want to push prices down even further: calculating in advance how much AI can save and then asking law firms to quote a lower total price. Citigroup has already required law firms to bid on projects and specify how much AI has helped them save. Morgan Stanley plans to have most external legal work procured through competitive bidding by the end of the year, with a greater emphasis on fixed pricing. Goldman Sachs is also pressing law firms to explain exactly how much efficiency AI has brought. This directly challenges the longstanding business model of major law firms, which relies on "billable hours × hourly rates." Tasks like research, contract review, and litigation document retrieval can all be accelerated by AI, yet the hourly rates of top U.S. law firms continue to rise. Wall Street now wants to deduct the money saved by AI directly from legal fees. [Original Link]