I have derided notions that there is a conflagration of firings of law firms (See my posts of Feb. 28, 2008: lack of responsiveness; and June 18, 2007: references cited.). I went so far as to publish an article about this urban myth. Click here to see a pdf of my article.
That said, however, it is likely true that a couple of management trends account for some number of law firm terminations. Competitive bids and RFPs would be one of the trends (See my post of March 30, 2008: Requests for Proposal and references cited.). Some incumbent firms lose out when they compete with new firms to do work. You could say that the formerly used firms are fired.
The second cause of terminations would be convergence projects, where law departments trim the number of law firms they retain (See my post of April 2, 2006: counterpoints to convergence.). The whole purpose of convergence is to fire some number of law firms.