If a general counsel decided to drop a set number or percentage of the law firms used that were paid more than a de minimis amount, that would encourage better evaluations of firms. In-house lawyers would also more credibly tell the firms they use that the firms must stay on their toes.
Forced-ranking and lopping off the lowest few might also lead to some gaming if lawyers retain a firm only to drop them. The compromise might be for a general counsel to unleash this effort every few years, to clear out the undergrowth.
My previous posts on this controversial practice all pertain to stack ranking employees (See my post of May 4, 2005 decrying forced rankings; Nov. 14, 2005: arguments in favor of forced ranking; April 27, 2006: forced rankings of staff; Dec. 1, 2006 #3: research findings on forced ranking; Oct. 12, 2006: if turnover is low, forced ranking makes even less sense; Sept. 21, 2008: line managers are unwilling to differentiate among their reports on evaluations; and April 24, 2009: nine-box grid and forced ranking.).