After seeing and hearing too many fee discussions about discounts - a new thought clicked in my head. Clients are negotiating on discounts, not rates. The actual rates might matter with a wide a variation, but in most circumstances when clients push on law firms, it's not on the absolute rates, but instead it's about how big is the discount.
Upon reflection, there is a logic of sorts to this method. In-house counsel get pressure from management to cut legal fees. The simplest, most direct and seemingly logical message to bring back to management: We increased the discount by X% (which might be interpreted as - our legal fees will go down by X% this year).
The problem is - you can't and shouldn't make that leap of faith about savings . Even if the client/in-house lawyer keeps a close tab on hours billed (not the highest value task IMHO), then the absolute rate is what should matter - not the discount.
My suggestion to clients: If you want to maximize the return on your efforts with hourly billing, instead of talking discounts, focus your negotiations on rates.