Turnover fell for the second year in a row at Freshfields Bruckhaus Deringer. From an all-time high of £800m in 2003, revenues sank to £785m in 2004 and £780m in 2005.

That 2003 high point came on the back of Freshfields' groundbreaking 2001 mergers with German firm Bruckhaus Westrick Heller Lober, but since the departure of former chief executive Alan Peck the figures reveal a steady decline.

Indeed, the firm's average PEP reached a high of £750,000 in 2001, but this has now fallen to £700,000. Ironically, the firm's strength in Germany has probably caused it to suffer more than its magic circle competitors, given the slowdown in the German economy. However, the firm's corporate practice in London needs a good boost. Following the announcement of senior partner Anthony Salz's retirement this summer, the firm's management has some tough decisions to make to keep pace with its magic circle competitors. While the partners may like to portray a country club image, Freshfields did not take any prisoners following a thorough review of its Asian operations - it axed its Bangkok office, while Singapore was downsized.

Freshfields opted for a softer approach in Germany, but acknowledged that the core German corporate practice was overpartnered by moving three partners from corporate into finance and litigation. Early retirement was also encouraged among some of the older German partners.

Turnover for the global corporate practice slumped £7m to £258m last year, representing 33 per cent of total revenues. While the firm put this down to market conditions, Linklaters for one seems to have done all right. Shockingly, the revenues for the London corporate team have remained static at around £100m for the last four years.

Corporate did not get off to great start with its role in Philip Green's bid for Marks & Spencer (M&S), when Freshfields was booted off the deal after M&S (advised by Slaughters) successfully alleged a conflict of interest.

An appointment to Apax's panel was a signifier of better things to come, and indeed private equity has been a bright spot for Freshfields. Other private equity clients include Cinven and Permira. The department also showed that it was unafraid to take controversial roles when rising star Mark Rawlinson undertook a valiant, if ultimately doomed, defence for Manchester United against hostile bidder Malcolm Glazer.

Finance did little better, with revenues dropping from £160m to £148m. Clients such as Citigroup, Goldman Sachs, Deutsche Bank, HSBC and ABN Amro would suggest that there is not too much wrong, but project and asset finance found it particularly tough. It is now down to new global head of finance Perry Noble, who flew in from his role as Asia boss, to shake things up.

On the credit side, the litigation group was much more successful, with global turnover up from £118m to £130m. London accounts for around £80m. The firm is reaping the benefits of its commitment to the contentious practice following the decision of other magic circle firms to downsize.

In London 60 per cent of litigation work can now be described as public/administrative law, with banking and financing coming a close second. Japan Tobacco was one of the firm's biggest clients, while embattled Russian oil company Yukos will no doubt make for an interesting client.