When it emerged last week that Clifford Chance (CC) had blamed the credit crunch for the firm axing a six-lawyer team from its Manhattan HQ, eyebrows were raised for a number of reasons.

For one, you would expect bankers' heads to be starting to roll – and they are – but for a law firm to respond this quickly to a down-blip is unprecedented.

Many were also amazed that CC even had a team as specialised as the one that was let go. It worked exclusively for rating agency Standard & Poor's (S&P) and specifically reviewed documentation used to rate asset-backed securities. Such specialised teams are more frequently seen in pieces of big-ticket litigation. No wonder then that when the asset-backed securities market tanked, the group was cut.

This also comes against a backdrop in which there has been a shift among major finance-driven law firms to guard against over-specialisation in the financial products arena as they attempt to hedge against market fluctuations. CC itself is part of this trend, having merged its debt and equity capital markets teams and expanded the group to include structured debt and corporate trusts earlier this year.

But the S&P team was not just specialised, it was brought in specifically to do this type of work. Even one CC partner admits: "It could almost be done in-house, but it is effectively franchised out."

If anyone can take on this kind of work, it is CC. Its size lends itself to niche teams in a way that others – New York firms and perhaps Linklaters aside – could not hope to achieve, even if they wanted to.

In effect, the likelihood of there being redundancies elsewhere is quite small. CC itself has denied that any further lay-offs are in the pipeline.

But many eyes will still be on other firms with teams focused on sectors heavily affected by the sub-prime crisis. These include Sidley Austin, Cadwalader Wickersham & Taft and Baker & McKenzie.

Sidley Austin will no doubt be analysing its (large) exposure to the structured investment vehicle (SIV) market, which is suffering from a severe lack of liquidity.

Although there is currently plenty to do fire-fighting SIVs, without new instructions the flow of work will dry up soon. Meanwhile, Bakers' finance practice is known to do a significant amount of work for S&P.

In response, these firms point to the diversity of the work done by their clients – for example, if collateralised debt obligations are not the flavour of the day, they can turn to funds work.

Bakers head of finance Jonathan Walsh told Legal Week the firm tries to ensure its lawyers have plenty of transferable skills to guard against this.

Then again, if the credit crunch continues, transferable skills may not be enough. Already one London finance partner reports a number of CVs on his desk from lawyers who specialise in collateralised debt obligations.

"They claim they have always wanted to branch out," he says.