L&G is undergoing a company-wide overhaul of its legal advisers, requiring each of its firms to provide in-depth information on their working practices and how L&G is charged.
One source says: "Like every insurer L&G is looking at how to save money on expensive legal services."
Firms that provide bulk liability work and general insurance work will come under particular scrutiny.
Commenting on the information firms are being forced to hand over to L&G, an industry insider says: "They are going to benchmark and check our performance against each other. They are going to end up cutting the firms.