Forty per cent of those interviewed believe that the economic climate will worsen over the next six months, compared with just 23 per cent last quarter. The report was carried out on behalf of The Lawyer by research companies Wheeler Associates and McCallum Layton.
Many expect these fears to translate into job cuts, with those at the largest City firms most at risk. London firms are four times more likely to be making redundancies over the next six months than those in the regions; and of the regional firms, the country's top 30 are twice as likely to be cutting staff than the next 70.
Much of this gloom can be traced to managing partners' concerns about their clients. The key business issues facing law firms are fee pressures from clients, late payment by clients and increased competition for work.
Thirty five per cent of those interviewed said that these issues were more of a concern than six months ago.
Despite this gloom, average fee income across all the firms in the survey is expected to grow by 5 per cent; but expectations for IT, intellectual property and commercial property are down to growth of just 1 per cent.