Billable Hour Going By The Wayside

In this economy, it is becoming more and more clear that the traditional model of billable hour for attorney services is doomed.  As much as the high-powered law firms hate to admit it, the clients now have leverage to negotiate better (and more rational) fees for work- particularly routine run-of-the-mill stuff.  Companies like Cisco Systems are taking firms to task in getting more value for the legal dollar.  Does this present an opportunity for the small to mid size firms?  If the overhead for the big firms is too much to manage, should corporate counsel start to consider going with more lean practices?