Law firm's partners see their pay cut by third ... to nearly £1m

Senior lawyers at Clifford Chance, one of the "magic circle" of biggest London partnerships, will have to make do with an average of £900,000, down from £1.32million last year. The move is expected to be followed by other leading firms such as Freshfields, Allen & Overy, Slaughter & May and Linklaters.

The reductions in pay come ahead of what will be the worst City bank bonus season since 2001 with thousands of employees getting cuts of up to 75per cent or in many cases a "doughnut" or zero award. The major law firms have been hit by a fall-off in fees from mergers and acquisitions deals and from banking and private equity clients. Although some areas such as litigation have done better it has not made up the shortfall, according to legal experts.

Clifford Chance partners have been told to brace themselves for much lower earnings this year. Global managing partner David Childs told The Lawyer magazine: "We give partners guidance from time to time and have said to them that profit per equity partner would be significantly down on last year."

A fall below the £1million mark is hugely significant, according to The Lawyer's editor Catrin Griffiths. "One million pounds is a totemic figure because it means they're on the Wall Street level. It is part of their branding. To be in the global band they have to be super profitable," she said.

Last year an estimated 1,500 lawyers in London earned £1million or more after a surge in income over the past five years. This has given them spending power that ranks alongside the investment banking industry, contributing to the surge in property values and other indicators of wealth in the capital such as expensive restaurant openings.

The best paid partners were at Slaughter & May with an average profit per top partner of £2.25 million. Since 2004 the average for the magic circle firms as a whole has risen by two thirds.

Most London lawyers are now expecting this to be the leanest year at least since the aftermath of the dotcom collapse and the 9/11 attacks in 2001.

Clifford Chance revealed this week that it is making about 80 lawyers below partner level redundant. The managing partner at one mid-sized London firm said: "It's going to be absolutely awful."