I thought I’d add to a nice post from Thoughts of the Arch Chancellor about the parry mechanics. Some of these comments were rather similar to what I might have written - describing the various forms of parry rules and the effect they have on the game.
I would add that rules which give you the option of reducing your offense in order to increase your defense (“parry”) against a single foe, tend to discourage any use of parry at all. If you are outnumbered, as PC’s often are, you are lowering 100% of your attack but only partially increasing your defense (since some of the foes will ignore your parry). If you outnumber the foes, you are lowering your attack but you don’t even know if defense will be useful because the foes might attack someone else. If you are in a confused melee, you are lowering your attack but it might be the case that no foes attack you, or multiple foes attack you, and either way you aren’t really breaking even. Finally, even when you are one-on-one, it is to your benefit to go “all out”, because you might just kill the opponent instantly, and then you won’t need defense anyway.
Of course, there are still some reasons you might go on the defensive. If lowering your offense doesn’t really affect your attack, because you greatly outskill the foe and the game doesn’t give you much bonus for having much more offensive skill than the foe's defensive skill, you will go on the defense. Or if the tactical situation calls for extreme defense, you are holding off the enemy or something like that. Or if you are positive that you are one-on-one with a foe. But most of the time, you just don't want to lower your attack in order to increase your defense against only a single foe.
Rolemaster was had this exact mechanic, but it was also somewhat extreme in that, as you gained levels, your defense didn’t really increase while your offense did. So you didn’t want to parry, for the reasons I give above, but it was the only way to gain any sort of decent defense. I found the whole idea rather unpleasant, but the truth is that I never played at high level, just at low level where you could attack all out and forget about the parry rules.
A game where you have parries automatically doesn’t suffer from these difficult choices. But I have to say I dislike any single parry system because it strongly encourages concentration of fire, something games tend to encourage too much anyways.