Titan Clifford Chance loses its lead spot

Average partner earnings at the London-based firm slumped from £1.16m in 2007-08 to £733,000 over the 12 months to 30 April as its key banking and corporate clients struggled in the global financial turmoil.

The group, whose clients have included Royal Bank of Scotland, Barclays, UBS, Banco Santander and Lehman Brothers, said annual revenues fell by five per cent to £1.26bn.

The dip in revenues means the law giant loses its crown to US rival Skadden Arps Slate Meagher & Flom, which billed $2.2bn (£1.33bn) in 2008.

Clifford Chance’s global managing partner, David Childs, said: “Given the scale of the financial crisis and the severity of the economic downturn, last year was very challenging for our clients and therefore for us.”

The steep fall in profit is attributed to deep restructuring costs which has resulted in eight per cent of UK staff being made redundant, including 130 salaried lawyers and 115 other staff since 2007. The shake-up will mean the firm will lose around 15 per cent of partners by the end of the year.

Clifford Chance is particularly vulnerable to the collapse of the financial sector because of the size of its banking practice. Clients have scaled back on spending and mergers and acquisitions work has declined

Allen & Overy and Linklaters are also likely to suffer a decline in profit as they absorb significant restructuring costs, having made hundreds of staff redundant this year.