The Freehills staff salary freezes, which have been in effect since 20 March will remain in place into the new financial year.

According to an internal email recently sent by Freehills managing partner Gavin Bell, the freeze affects all staff, business services and lawyers. "After considering our forecast for next year and conducting a review, we have decided to place a freeze on all salaries, effective immediately, including this year's 30 June review," he said.

Partners have been advised they can expect a drop in income due to a forecasted drop in the firm's profitability for the next financial year. If the firm's profit does not fall in 2010 the 'upside' will be shared with colleagues in an "equitable way", but if the decline continues then tighter measures are expected.

Freehills has already cancelled its annual national partners' conference, and offered voluntary flexible working options, such as career breaks, flexible hours and purchased leave. However, the firm said it has no plans for retrenchments because it has already invested significant 'effort' into recruiting staff.

A spokesperson from the firm dismissed recent blog comments that Freehills had not offered jobs to any summer clerks. "It was untrue and completely wrong that we didn't make offers," the spokesperson said.

Other top tier firms have responded to the economic downturn in different ways. For instance, Blake Dawson recently retrenched 89 staff, while HWL Ebsworth has laid off 17 staff.