Top City lawyers may be reaping over £1 million a year but law firms are starting to make penny-pinching savings as they feel the impact of the financial crisis.

A survey published tomorrow on how top UK law firms are cutting costs has found hundreds of redundancies but also savings from cheaper toilet paper to sandwiches.

The survey by Legal Business, the monthly trade magazine, found that the top 100 UK law forms have made a total of 641 redundancies out of their 48,000 employed solicitors, although other reports have put the total at closer to 900. Many more are predicted.

The report comes as law firms across the City brace themselves for the release of their half-year results, with revenues at most leading firms expected to be flat or slightly down for the six months to October 31. Eversheds, the UK's eighth-largest firm, said it expected to see fee income dip by 4 per cent.

Meanwhile law firms are looking at several other ways of making savings, from cutting down on taxies to cancelling Christmas parties.

One City firm, Nabarro, which billed its clients more than £140 million in 2008, has cancelled its Christmas party, scrapped sandwiches at lunchtime training sessions and, according to one of its solicitors, brought in "cheaper hand towels in the toilets".

Another solicitor at Mills & Reeve, the Cambridge law firm, reports that the firm has cut costs by purchasing just one colour of file for client work: buff.

And a third solicitor, with Ward Hadaway, the Newcastle-upon-Tyne law firm, says: "It's second class everything, from stamps to train tickets."

James Baxter, editor of Legal Business, said: "UK law firms have had a terrific run over the past five years or so, making more and more money from the booming global economy."

In the last financial year, which ended in April, the top 100 firms billed clients a "whopping" £13.96 billion, making £4.73 billion in profits, Mr Baxter said. Salaries for the highest-earning partners topped more than £2 million, with some newly-qualified lawyers commanding £97,500 a year.

But, he added: "This is now come to a grinding halt."

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