An in-house lawyer based in England told me that many law firms their negotiate caps on their firm’s liabilities. In return for granting discounts or other economic concessions, firms may ask law departments to limit their liabilities in malpractice actions.
I had not heard of US-based law firms that seek such a quid pro quo but it certainly seems to be a bargaining chip that inside counsel might put on the table. As I think negligence actions by law departments happen rarely, a concession on that right might save the face for a firm to agree cost reductions (See my post of July 26, 2010: data on malpractice actions; and Nov. 8, 2009: malpractice of law firms with 8 references.).