It is arguable that law departments deserve discount levels like those granted to other clients of a firm where the discount is based solely on the volume of fees paid in a year. If your law department spends $2 million on a firm during a year, your department has the right to say, “We should get the best discount arrangement that you have granted any other company that spends $2 million on you.”
My gripes about most-favored nation demands (MFN) boil down to the impossibility that legal services are comparable by type of legal issue, need for partners, knowledge of the business, priority of the work, and other characteristics. Without equal circumstances, there is no justification for equal discounts (See my post of April 30, 2009: MFN impositions with 8 posts.).
But a dollar is a dollar, and perhaps – just perhaps, since I still don’t like discounts – one client who spends the same amount as you and has negotiated better rates ought to benefit you.