Los bancos de Wall Street exigen rebajas a los bufetes por la IA

Goldman Sachs, Morgan Stanley and Citi are planning new payment agreements with major law firms, believing that artificial intelligence (AI) has streamlined routine work. The banks are pressuring top law firms to reduce their fees, arguing that the lucrative model that enriched top attorneys for decades is unsustainable in the AI era.

Morgan Stanley and Citi have told high-profile law firms their intention to establish new payment agreements that would allow them to save money. Goldman Sachs has asked law firms how much technology has saved them and expects to share in those benefits. The pressure from some of the biggest clients of the major law firms could contribute to transforming the financial model that supports the legal sector.

Much of the work, such as research, document review, contract evaluation and evidence gathering in litigation, can now be done much faster with AI. If the number of hours dedicated to a matter has been reduced thanks to AI, then transaction costs should decrease significantly, says Adam Meshel, Citi's legal director. The bank has begun asking law firms to submit offers explaining how much they save through AI during the bidding process.

Meshel expects a different work model based on this approach within a year. According to Eric Grossman, a legal advisor at Morgan Stanley, top lawyers have been remunerated based on billable hours for their associates. His remuneration model is now unstable. Grossman says the bank is willing to continue paying high sums for the expertise and talent of top attorneys, but that most external legal work will be tendered through competitive processes and paid with alternative agreements, such as fixed fees.

He believes this should cost less to the bank and that law firms could remain as profitable as before by using AI to manage more cases. Goldman Sachs asked law firms about the greater efficiency they can achieve in completing tasks with AI. The bank did not comment. Hourly rates at top law firms have skyrocketed in recent years, in part to fund a war for talent to snatch stars from competitors with overpriced salaries.

According to legal tech firm Pursuit, the average hourly rate for partners in the largest US law firms is $798 this year, a 33% increase from 2023. The rate for partners has increased by 29%. Nearly half of the top law firms say AI has affected their pricing model, according to a survey. A hybrid approach with fixed fees for routine work and hourly billing for more complex work is likely, the source suggests.

Some law firms have already started hiring less experienced graduates. According to Citi's survey, 47% reported a decrease in summer intern recruitment -the gateway to top law firms - this year compared to the previous one, and 49% expect a smaller promotion next summer compared to this year. Gretta Rusanow, legal advisory director of the law firm group, says a hybrid approach with fixed fees for routine work and hourly billing for more complex work is likely.

Concern over legal costs in an AI-dominated world has spread to other sectors. Steven Croley, a legal advisor at Ford, says the automaker is hiring more in-house lawyers and managing more legal matters internally as AI makes external legal work cheaper, reducing the use of external law firms. He predicts a radical change in the pyramid-shaped economic model of top law firms, calling it a comotion.