A single rate structure imposed on multiple law firms; sensible?

I heard an unusual question about discounts from standard billing rates. The standard rates of law firms vary, with the result that law firms A and B may be doing identical work, but law firm A charges 10 percent off a $500 an hour billing rate while law firm B charges the same 10 percent discount but off a $400 an hour billing rate. Why aren’t GCs asking all firms to work for a specified rate, rather than asking for a discount off widely divergent rates?

Law departments would realize that a single-rate for lawyers at a certain level – such as $400 for 15 year partners – would lop off the top echelon of law firms. It would effect a regionalization or second tier policy under the guise of reducing billing rates. (See my rant of Oct. 30, 2005 on most favored nation rates and the posts cited there.)

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