North East firm Walker Morris saw average profits per equity partner (PEP) drop 27 per cent in the last financial year on the back of a turnover drop of 8 per cent.
The firm’s PEP dropped from £670,000 during the 2007-08 financial to £486,000 in 2008-09.
Revenues fell from £48m to £44.2m during the same timeframe.
Walker Morris managing partner Peter Smart said: “While this reduction is disappointing we can’t defy gravity.
“It’s nonsense to believe that turnover and profits can rise inexorably year on year.
“We’re at least fortunate that we have above average profitability and so even the reduced profit is reasonably healthy.”
Smart added that minimal growth in countercyclical practices such as litigation and restructuring had caused problems for the majority of UK firms during the downturn.
He said: “While we saw growth in both these areas [litigation and restructuring] it was not as much as we expected.
“Clients have been desperate to conserve cash and have avoided litigating wherever possible. Poor realisations have put a brake on the level of insolvencies.”