Major banks are demanding steep fee cuts from law firms that use artificial intelligence, The New York Times reports. Some clients are asking for reductions of up to 50 percent, warning they will move their business elsewhere if firms do not pass on AI-driven savings.

Goldman Sachs, Morgan Stanley, and Citigroup are among the banks pushing for the changes, according to reports. They argue the traditional billable-hour model no longer makes sense when AI automates routine work like document review and due diligence.

Firms are pushing back, saying AI has not yet cut total work as much as clients assume. Industry data shows law firm revenue grew 11.3 percent in the first nine months of 2025, helped by higher billing rates. Some firms have responded by raising rates on the hours that remain.

The pressure extends beyond law. The Financial Times reported that companies are also pushing consultants to lower fees as AI reduces the need for outside work on IT and systems projects.

The fight over who keeps AI's savings could reshape pricing across professional services for years.