O'Melveny & Myers is the latest firm to announce layoffs with 90 associates and 110 support staff set to lose their jobs.
In a statement released by the firm O'Melveny chairman Arthur Culvahouse said that the firm had been cutting costs for two years by reducing support staff and shying away from making new hires.
He added: "We concluded further action was needed to adjust our staffing levels to current and future market demands.
"While our litigation practice continues to be very active and robust, we're taking these actions largely to address the slowness in our transactions area."
Associates and counsel affected by the cuts will receive between three and seven months' salary as severance payment.
A spokesperson said: "Our firm provided meaningful salary increases in January of this year and significant bonuses in December 2008, which was not the case at all firms. We want to be fair and generous with those who remain as well as those who depart."