The question on the minds of most equity capital markets lawyers is clear: just how long can it continue?

The value of European share flotations has slumped by 70% in the past three months with many companies deciding to postpone their listing plans indefinitely, according to data released this week by Thomson Financial.

In the three months between July and September, continental IPOs raised just £610m compared with $3.16bn over the corresponding period last year. And with the threat of redundancy hovering ever nearer to the City's IPO teams, even the most bullish lawyers concede that there is no sign of recovery on the horizon.

A smattering of recent flotations such as Burberry, William Hill and Focus Wickes has kept the wolves from the doors of the top magic circle teams.

Yet the initial slack that management accorded these lawyers as payment in kind for the millions of fees brought in during the boom has been all but used up. Even Linklaters, which has been there or thereabouts on every major float this year, has resorted to discounting substantially on aborted deals, a move unheard of until recent times.

Secondary rights issues, particularly in cash-strapped sectors such as insurance, are providing a modicum of comfort with Royal & Sun Alliance – which is understood to have instructed Ashurst Morris Crisp – leading the pack of large companies rumoured to be ready to tap the markets. Nonetheless, the work is less fee and lawyer intensive than IPO work as the premium legal work is largely done when companies first list. Moreover, the opportunities to win new clients in this line of work is poor compared to those existing when a company decides to come to market for the first time.

For the top firms, the pain is even more acute during the downturn as they are also having to justify, for the first time, expensive gambles upon the German equity capital markets scene. It is no small irony that the morning after newly-merged technology specialist Taylor Wessing held a celebratory press party last week, it was announced that the Neuer Markt was to close.

This latest setback for Germany's fledgling equity culture could not have come at a worse time for those expensively assembled UK law firms sitting tight in Frankfurt. While German capital markets lawyers are by nature more generalist than their English counterparts, the precipitous decline in the German equity markets is doing little to dissuade the top UK firms that they are over-exposed to the (non-existent) big-ticket work.

It is no surprise that Germany's retail investors are increasingly turning to more traditional assets such as bonds and property in a bid to beat the market. One top City partner told Legal Week: "The institutions are basically on strike with regard to new European issues and that position is unlikely to change for some time."

Unless the City's top capital markets lawyers can prove as versatile as their clients, going on strike may not even be an option.