This story from a friend who recently started as General Counsel at a Bank.  Previously, this person had been GC at a different bank that was acquired and then took some time off after the acquisition.  The GC relayed a story about a recent conversation  with one of the Bank’s outside lawyers.  In that conversation, the GC commented to the lawyer about how much the firm’s rates had increased in the past two years, and how the GC was surprised given the economy and how firms had been struggling.

Here is the outside lawyer’s response:  "Our clients were asking for such large discounts that we had to raise our rates so we could still net what we wanted to net."

If I were an inside lawyer, I would immediately be reviewing the bills from each of my firms to determine the effective hourly rate I was paying.  And if it has gone up in the past two years,  I  would be having a "conversation" with that law firm.

PS–this illustration of law firm gamesmanship is precisely why asking for discounts is not going to yield the savings inside lawyers hope for when they request discounts.