Top US law firms are better placed to weather the downturn than the biggest UK firms, and will be in a better position when the demand for legal services picks up, the head of the world’s biggest firm claimed this week.

Eric Friedman (pictured), executive partner at US firm Skadden, said the traditional litigation and restructuring strength of big US firms allows them to outperform top UK firms during the downturn. He added that mass redundancies at some big UK firms will leave them short on expertise and fighting to rebuild their teams when the economy picks up.

Skadden billed £1.33bn in 2008, toppling magic circle firm Clifford Chance as the biggest firm in the world by revenues. Last week, Clifford Chance reported a 5% fall in turnover to £1.26bn, making Linklaters the largest firm in the UK with revenues of £1.30bn, closely followed by Freshfields with £1.29bn.

‘When the demand for legal services picks up, the demand for lateral hiring shoots up most acutely among the firms that made redundancies,’ Friedman said. ‘This makes lateral hiring a hugely competitive and expensive process, because everybody is rebuilding their ranks at the same time. And the more senior you go, the more difficult and expensive it is to rebuild.

‘Without making mass layoffs, we were able to reduce our headcount pressure,’ he added. Skadden launched ‘Sidebar Plus’ in March, a programme allowing lawyers of all ranks to take a year’s sabbatical on a third of their pay and the continuation of some benefits. They were urged to undertake public interest projects: ‘Having hired, trained and developed our legal talent, we thought the scheme was a more elegant way of dealing with the problem.’

Friedman said the depth of Skadden’s litigation and bankruptcy practices had ensured a good year in 2008. ‘They provide a strong counterbalance to a troubled economic environment,’ he said. ‘Traditionally, US firms have always had bigger litigation and restructuring practices. In a challenging economic climate, they will fare better.’

Former Clifford Chance managing partner and management consultant Tony Williams agreed that the US firms’ litigation strength put them in pole position in the downturn. However, he added that UK firms had been ‘pruning rather than digging up the plants’ in making ‘necessary’ redundancies.