These firms "can't enter a cost that doesn't fit in the box you create," says Susan Hackett, senior vice president and general counsel of the Association of Corporate Counsel, whose 24,000 members are among the major employers of outside law firms.

"It can be something as simple as saying no plane travel in excess of $500," Hackett adds. "If the lawyer tries to enter a ticket for $650, it will bounce, and the onus is then on the firm to say why the expense was necessary."

This September, Hackett's association plans to begin a more organized assault on high legal fees. The multiyear effort will result in a set of tools that can help even small corporations get a handle on legal costs.

These include best-practice guidelines to help model and price specific legal services such as certain stages of litigation, and an online network where corporate counsels and law firms from across the country can easily obtain references and compare fee information in specific geographic areas.

"The billable hour stinks, but it is the symptom of the underlying problem," Hackett says, noting that most corporate law departments are too small to easily monitor what their outside counsel is doing.

Combined with that reality, "law firms are not run on the concept of how quickly and efficiently they can do work for their client," Hackett adds. "They are run on how much they can charge their client before they are fired. It's the throw-up point."

Getting a handle on outside legal costs certainly makes sense for corporations. It can be a boon to the bottom line. Dupont, for instance, pioneered a program to partner with its law firms in the 1990s after mass tort litigation left it swimming in outside legal fees.

"We had a docket in excess of 4,000 cases and we were spending $140 million a year in 1994 dollars," notes Thomas Sager, Dupont's general counsel and senior vice president of litigation.

The company has since whittled down the number of law firms it uses to 43 from 350, has traded a promise of long-term relationships for a willingness by the firms to offer alternative fees and discounted rates, and has produced a host of systems to better track and monitor the legal work that results.

Sager said Dupont's cost savings is between $15 million and $20 million a year, or about 18 percent of the company's total expenditures on outside counsel.

Felice Wagner, who heads Sugarcrest Development Group, a law firm consultancy, notes that other companies have had similar success. It's no coincidence, she adds, that the industry spending the least on counsel is the group that most aggressively tracks its outside firms. The insurance industry pays, on average, just $294,098 per lawyer per year. “They have been very successful at putting the screws into their law firms,” says Wagner.

Whether or not these corporations will soon force white-shoe law firms into a new way of thinking is another story. "The Sullivan & Cromwells of the world like the status quo and don't see the need to move toward alternative fees," Sager says.

It's easy to see why. The 2007 Law Firm Economics Survey from Lexis Nexis found that the operating profit margins at top firms climbed to 41 percent in 2007 from 35 percent a year earlier, while a separate recent survey by the National Law Journal found billing rates locked in a long-term climb, gaining an average of 7.7 percent in 2007.