Spurred on by budget pressures, companies' use of a controversial auction process to negotiate contracts with law firms has surged in recent years, a trend that could eventually reduce the revenue attorneys can expect to reap from clients.

Several big companies—including GlaxoSmithKline PLC, eBay Inc., Toyota Motor Corp. and Sun Microsystems—have used the tactic, known as reverse auctions or competitive bidding, to pressure law firms to lower prices, especially on high-volume work such as tax filings and intellectual-property transactions. Many lawyers now worry these auction-based pricing strategies are spreading to more complex projects.

"Is it making all of us uncomfortable? Yes. Especially when you start to move away from the more routine sort of work," says Toby Brown, the director of pricing at Vinson & Elkins LLP.

Reverse auctions pit multiple law firms against each other in an online chat room where they anonymously submit quotes for a particular job. Firms then race against the clock to tender incremental discounts against competing bids. If someone introduces a new low price in the last minute or two of the session, it can be extended for several minutes—launching another round of calculations and lower offers.

Legal expenses for Fortune 500 companies range from about $20 million to $200 million a year, according to Courtney Sapire, chief marketing officer for RFx Legal, a consulting group that works with companies to reduce their legal spending. Reverse auctions can help cut 15% to 40% off those costs, she says.