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Clifford Chance today lost its crown as the world's biggest law firm to an American rival as it revealed a 37% plunge in profits.
Average earnings per equity partner at the Magic Circle firm were £733,000 in the year to the end of April, down from £1,156,000 the previous year, as its major banking and corporate clients were hit by the global financial meltdown.
Annual revenues fell by 5% to £1.26 billion, meaning that US giant Skadden, Arps, Slate, Meagher & Flom now takes the top spot, having made $2.2 billion (£1.33 billion) in 2008.
Legal experts say that this is indicative of the shift in legal power from London back to New York.
Clifford Chance's banking, mergers and acquisitions, property and private-equity divisions suffered most in the downturn.
Profits have also been hit by the cost of staff cuts. Clifford Chance axed nearly 8% of its employees in London in January.
Globally, its partnership will shrink by 15% by the end of the current financial year.
David Childs, global managing partner, said: "Given the scale of the financial crisis and the severity of the economic downturn, last year was very challenging for our clients and therefore for us."
The firm's major rivals Linklaters, Allen & Overy and Freshfields Bruckhaus Deringer are due to deliver their results in the coming fortnight.
