I'm not sure what your first sentence means, but you're absolutely right that some GCs go with expensive outside counsel precisely because they're expensive. If it's a legal matter that's critical for the company, the GC can get blamed for going with a cut-rate firm, but not for going with a firm that's 'too expensive'.

Not sure why the downvotes. There is literally a saying in law: "nobody ever got fired for hiring Skadden". If you think this is ridiculous, don't shoot the messenger. And if you disagree that GCs hire blue-chip firms partly for CYA, please share your experience!

It's a lawyer joke. They saying goes that if you win your case, it's worth every penny.