Clifford Chance cash call to 400 partners

The credit crunch looks set to hit the City law firms hard after Clifford Chance, the biggest law firm in London — and the world — admitted it had ordered a cash call of £100,000 per partner, and is laying off 80 solicitors.

Clifford Chance says it aims to raise more than £40 million from its 400 equity partners.

The move comes as City law firms led by the monster practices that make up the so-called magic circle — Clifford Chance, Linklaters, Freshfields, Allen & Overy and Slaughter and May — batten down the hatches for a sharp decline in revenues from the collapse in the number of deals in the financial markets.

The Clifford Chance cash call comes from a firm that last year brought in revenues of
£1.3 billion, and will hit individual partners who are believed to routinely earn more than £500,000 a year with several getting in excess of £1 million.

Finance director Stephen Purse denied Clifford Chance was in crisis: "Every business as it grows reassesses its level of capital from time to time."

Word in the legal profession is that Clifford Chance, whose clients include Citigroup and Goldman Sachs, has been hurt by the implosions in investment banking.