Cadwalader, Wickersham & Taft, one of Wall Street's most prestigious law firms, saw profit per equity partner fall by almost a third last year.

A slump in the firm's finance and capital markets practices as a result of the credit crunch led to a fall in PEP from $2.7 million (£1.8 million) in 2007 to $1.8 million (£1.2 million) last year, according to The American Lawyer, a trade publication.

Revenue also fell, from $587 million (£402 million) to $506 million (£346 million), a drop of 14 per cent, the magazine reported.

Cadwalader's poor results are expected to be followed by top law firms on both sides of the Atlantic.

Earlier this week, Orrick, Herrington & Sutcliffe, a leading San Francisco-based firm, said that profits per partner had fallen by more than 20 per cent last year to $1.3 million (£890,000).

Experts in the UK have predicted that a host of City firms could experience a similar decline in profit.

US law firms typically end their financial year on December 31, while their British counterparts tend to work to a year end of April 30.

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