House prices have soared to a new record, bumper bonuses are back in the Square Mile and the stockmarket is booming. It’s deja vu all over again in London. After a painful bout of retrenchment quite without parallel, can the big City law firms expect a return to business as usual?

Along with the nagging suspicion that we may be close to the mid-point of a ‘w’-shaped recession, there are many reasons to suspect not. First, rising confidence and a rally in the equity markets have failed to lift M&A activity anywhere near a level that suggests a nascent deal-making boom is just around the corner. A recovery will take time.

Second, chastened in-house counsel – increasingly beholden to their colleagues in finance – are looking ever more closely at fixed fees, discounts, funnelling more work to regional practices and outsourcing. A rubicon has been crossed. Corporate lawyers are driving a harder bargain and will continue to do so.

Third, the bigger firms in particular are being put on the defensive in respect of their hefty fees (and stratospheric partner paypackets). In a column on banking bonuses headed ‘Stop the City gravy train’, for example, esteemed business commentator Chris Blackhurst last week described the magic circle as ‘an invitation for a competition inquiry’.

Back to the future? Don’t bank on it.