Fagan could not confirm the exact number of staff affected but said some graduate lawyers had been "counselled out for performance reasons".

"Our priority has been to maintain jobs and so we've adopted a policy of - absolutely where we can - [saving] positions, but in some regrettable cases people have been made redundant. But no more than you would have seen in 2006 or 2007 or any other year," he said.

Some graduates, who had also been on training contracts, had not been offered continuing employment if a position was not available.

There were no plans for further redundancies and those affected had been provided with notice, severance payments and counseling and assistance programs, said Fagan.

He also confirmed that Clayton UTZ had introduced a policy to hold legal and non legal salaries for the financial year but were still paying bonuses.

"We're holding salaries and it's in line with what we're doing on charge-out rates. We're holding charge-out rates constant for [financial year] 2010 and we think that's a good message and support for our clients, who are no doubt finding the market quite difficult. So we're supporting them by holding charge-out rates even though we're sustaining quite a number of increased costs across the firm," he said.

The firm has a flexible work practices policy, which includes part-time work and job sharing but had not asked staff to change their working hours or conditions in response to the current market conditions.

Some staff had been redeployed to busier practice areas, such as litigation, major projects and government, while regional offices had also shifted resources to areas of high demand, Fagan added.

- Sarah Sharples