By Cynthia Cotts – April 6, 2009 12:48 EDT

April 6 (Bloomberg) — U.S. companies, adopting a model used by DuPont Co., are adding firms with 300 or fewer lawyers to their outside-counsel roster and saving as much as half compared with fees of Wall Street firms more than triple that size.

DuPont and other clients, hit by the recession, are pressing firms for fixed fees or 10 to 25 percent discounts, industry consultants said. Lower overhead of smaller firms, such as 210-lawyer Hiscock & Barclay LLP, permit them to charge less than DLA Piper LLP or Latham & Watkins LLP, which have thousands of lawyers. Partners at smaller firms charge $500 to $600 an hour as top fees compared with as much as $1,000 at large New York firms.

“At a time when general counsel are looking for alternative billing arrangements, the playing field has been leveled, so smaller firms can make pitches to big clients that would have fallen on deaf ears before,” Thomas Sager, DuPont’s general counsel, said in an interview.

Starting in 1992, Wilmington, Delaware-based DuPont, the third-biggest U.S. chemical maker, set out to reduce its stable of law firms, applying rigorous criteria to cut costs and increase the value of legal services. The company’s current roster includes eight of the 100 biggest U.S. law firms and four times as many smaller firms, which Sager said he prizes for their “flexibility and creativity” in billing.

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