My beef with billing-rate discounts is that law departments cannot know whether they are getting steak or mad cow disease. With discounts, if they be smaller plates, will some people just go back to the buffet more? Why should such a blunderbuss technique be esteemed so highly? If billing rates accurately reflect the abilities and experience of the lawyer (See my post of March 12, 2006 on differential billing rates.), what justification is there — other than volume of work — for a law department to request a cheaper price?
Fundamentally, to chisel a few hours off of the billing rate is to leave intact the essential cost-plus basis for law firm billing, with all of its perverse incentives.