The law department should control all outside counsel hiring and firing

Well, not completely. Tax may have a loophole.

Otherwise, it is an accepted practice ideal for the law department to vet all law firms and retain them on matters. A looser leash finds the law department hiring a firm but letting that firm’s lawyers and the internal clients deal with each other directly. An even more diluted control means the law department approves certain firms for certain uses, but leaves it to internal clients to go to those firms as needed.

I favor stout law department control of outside counsel relations. To that end, a major US corporation has this authority etched in the corporate by-laws. “All provision of legal services advice shall go through the Office of the General Counsel.” Do you suppose a lawyer drafted that by-law?