Britain’s leading law firms are bracing themselves for the release of gloomy half-year results this week with early signs showing that the recent boom in commercial legal services has ended abruptly. Only two leading firms, Lovells and CMS Cameron McKenna, are projecting double-digit revenue growth for the six months to October 31, in contrast to the last full-year results released in July, when many City firms reported increases of between 10 and 30 per cent.

According to a survey of the top 30 firms published today in The Lawyer, the trade magazine, most expect first-half revenues to be flat or slightly down. The next six months are expected to be even more bleak. These forecasts come as the number of job losses announced across the sector nears 900. Several leading firms, including Eversheds, the UK’s eighth-largest law firm with turnover last year of £390 million, and Taylor Wessing, with revenues of £185 million, have confirmed that they are holding redundancy talks.

Senior legal figures told The Times that the number of job losses was likely to be far higher and it was not just junior lawyers who would lose their jobs. Expensive senior partners at some firms have been stripped of equity and younger partners with no clients have been told that they are no longer needed, said Dominique Graham, director of Graham Gill, a legal recruitment company. Last week, Eversheds told its equity partners that they would not receive their quarterly share of profits until at least March as it seeks to shore up its capital.

David Gray, the chief executive of Eversheds, said: “Given the economic turmoil of the last six months, it is not surprising that law firms are facing reduced revenues. Eversheds will post a small decline in revenues of just 4 per cent, which is further evidence that the business is holding up well.”

Law firms can do well in downturns because areas such as employment and insolvency pick up, but many doubt that this will cover the decline in M&A, property and finance.

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