When Revolut’s chief legal officer announced on Linked In in May that the UK-based fintech was overhauling the traditional law firm fee model, he did not anticipate that the news would cause such a stir.

“[I was] surprised by the engagement,” says Tom Hambrett, referring to the hundreds of reactions to the online post. For years, in-house lawyers have wrestled with ever-tightening company budgets while trying to instruct the best lawyers to negotiate, defend and advocate for them. This has been achieved using a panel system — a roster of external law firms that are appointed as the go-to advisers, and usually refreshed every two to three years. Companies attempt to control pricing by making firms sign up to certain fee terms to have the privilege of being on the panel, while outside counsel get the security of repeat revenue. Now, AI looks set to swing a wrecking ball into that model.

A number of Wall Street banks, among the most important clients of large law firms, are pushing their legal advisers to cut fees, arguing that the business model that has enriched top lawyers for decades is not sustainable in an era of AI. Goldman Sachs, Morgan Stanley and Citigroup are all expecting their legal advisers to pass on cost savings from the technology, sources told the FT this month. The equation is simple — if the number of lawyers and hours being spent on a matter has come down because of AI use, clients should pay less.

At Revolut this means law firms losing the security of long-term panel slots and quarterly reviews. Those not providing the best quality work or value will be at risk of getting cut: “Buying power has shifted,” says Hambrett. Some smaller players are already taking advantage of the uncertainty. In 2025, two partners from City law firm Mishcon de Reya set up Three Points Law, a “tech-enabled” outfit. The boutique, which counts English footballer Marcus Rashford and Formula 1 driver Alex Albon among its clients, as well as businesses such as property investor Shaftesbury Capital, pitches itself as using AI instead of an army of associates.