On the refusal to pay for first and second year associates

At a panel this month, I heard that a year ago Home Depot’s general counsel told his law firms that the law department would not pay for the time of first and second year associates. When asked about the reaction of firms to that prohibition, he said “There has been very little pushback” (See my post of May 11, 2007: associates and complaints about them with 13 references.).

The general counsel made clear that new associates are welcome to work on matters, but not to bill for their time. Is there receptivity for deeply discounted rates?