As many as 10,000 lawyers could be out of work in the UK in the next two years as the legal business faces its worst slump in decades.

More than one in ten of the country’s 83,000 privately employed solicitors could lose their jobs, recruiters, consultants and senior law firm partners told The Times, and will struggle to find new jobs even as the economy emerges from the recession.

The total number of jobs in the legal sector, including non-solicitors, fell by 16,700 in 2008, from 296,500 to 279,800, according to the Office for National Statistics, and the scale of losses is set to worsen this year.

The shake-up has thrown the traditionally conservative sector into turmoil, with leading firms shedding thousands of jobs, freezing salaries and telling trainees who expected to be offered permanent employment that they will not be kept on. Even partners, once regarded as secure for life, have not been spared. Industry observers said that further job losses were inevitable.

Lawyers who fall out of work have little hope of finding new jobs, with vacancies for associate solicitors down by 95 per cent this year, recruiters said. “It’s the worst year ever, by some margin,” Nick Root, founding partner of Taylor Root, a leading recruitment agency, said. “Those people who are being let go will not get another job.”

Meanwhile, thousands of new law graduates this year will intensify the recruitment squeeze.

Britain’s commercial legal sector, which contributes more than £15 billion a year to the economy, grew at a dizzying rate in recent years, driven by mergers and acquisitions, commercial property, private equity and leveraged finance.

In 2007-08, the 100 biggest firms enjoyed record profits of more than £4 billion and hundreds of partners earned in excess of £1 million.

But the market shuddered to an abrupt halt in September after the collapse of Lehman Brothers. Profits are plummeting: in recent weeks, leading firms, such as Eversheds, Hebert Smith, Lovells and Norton Rose, reported a decline in partners’ earnings of up to a third for the 2008-09 financial year, which ended on April 30. As those results were boosted by a healthy first-half, next year’s results are likely to be bleaker still.

Not only are partners experiencing a sharp reverse in earnings, but, unlike in previous recessions, many are losing their jobs. Scores have been pushed out from the City’s biggest firms — including 47 at Allen & Overy, part of the “magic circle” — while others have been stripped of equity and forced to take a pay cut.

Discarded partners accustomed to earning more than £700,000-a-year have been shocked to find that they can command as little as £200,000 from the few firms that are hiring.

Firms are placing a greater emphasis on productivity, recruiters said, insisting that prospective hires bring with them a dependable client following. In some cases, partners have been offered commission-only deals — pay historically has been based on tenure rather than performance.

Unemployed junior lawyers are finding it even tougher, with one recruitment agency receiving about 700 applications for three entry-level vacancies. Those associates who have kept their jobs have had their salaries frozen.

UK commercial law firms remain internationally competitive and will recover, Scott Gibson, a consultant at Hughes-Castell, a recruitment agency, said.

However, they are likely to emerge from the recession leaner, with a smaller ratio of associates to partners and more aggressively managed. The notion of job security at big law firms is unlikely to endure. “No lawyer is ever going to think they’ve got a safe job again,” Mr Gibson said.

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