Partner profits at one of the City’s best-known law firms plunged below the £1m mark last year as the credit crunch finally caught up with the solicitors who did many of the biggest boom-time deals.

Herbert Smith, one of the top names in big corporate litigation, said profits fell by as much as 22 per cent last year, marking the start of what is expected to be a tough results season for the “Magic Circle” of leading law firms.