After having a reasonable an enviable results season, is the Magic Circle finally facing up to the fact that their clients might not be doing so well? The Lawyer reports that rates for the City’s big hitters have fallen by a third in the last twelve months from £680 an hour to £450. This is the first time top legal advisors have had to drop rates in years.

Even if the MC firms themselves don’t necessarily consider their latest results stellar, outsiders see things rather differently. The Times observed recently "Law firms enjoy vintage year despite dip in profits" adding:

Britain’s biggest law firms suffered a dip in profits for the first time in a decade last year but still enjoyed one of their best years, earning more than £4 billion.

It has left City lawyers with an awkward dilemma: how to explain their embarrassingly high profits to clients who are struggling to survive the recession.

The pressure to drop rates is understandable then but let’s not get the violins out just yet – it is understood that top insolvency partners can still earn up to £900 an hour.

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Magic circle hourly rates drop by third as clients flex muscles [The Lawyer]