As banking clients fall, will law firms look to their old friends the accountants to help them through?

As insolvency lawyers' hopes that they would ever see a major revival in demand for their services began to fade, there was a palpable sense within law firms that the big accountancy firms had lost some of their status as clients. The big four of KPMG, Deloitte, Ernst & Young and PricewaterhouseCoopers (PwC) remained important clients in their own right and good sources of referrals but, as the boom stretched on, accountants fell down lawyers' pecking order – while banks rose upwards.

Glance at the restructuring and insolvency sections of legal directories, and law firms make copious mention of banking clients, advising corporates or even highlighting work with hedge funds and distressed investors. What is painfully absent is much talk of the accounting firms that would have once been key elements of any respectable insolvency practice.

How outdated such notions seem as the financial services industry faces a gloomy future, while there are widespread expectations that western economies are set to see the first major upturn in restructuring and insolvency in 15 years. Perhaps most symbolic was PwC's instruction of Linklaters on the UK administration of Lehman Brothers, which came two months after the firm had been frozen out by JPMorgan. Given how lucrative large workouts can be, it has not been lost on City law firms that their chances of getting through a transactional slowdown without taking major damage will likely rest on securing a handful of big-ticket restructuring deals.

But a key question will be which law firms have maintained strong enough accountancy relationships to position themselves for a UK heading into recession. Generally speaking, insolvency work in the UK has largely been dominated by the magic circle, plus Lovells and Denton Wilde Sapte. Within that group, some would argue that Allen & Overy (A&O) and Clifford Chance, are more focused on creditors than accountants, though the rest would appear to be well positioned. Linklaters has particularly strong links with PwC, having acted for the accounting firm on Enron, and was also last month instructed by KPMG as Hong Kong liquidators of Lehman. Freshfields Bruckhaus Deringer has also already secured a major post-Lehman mandate from Ernst & Young as administrator on the collapse of Heritable Bank.

Likewise, Lovells' links with Deloitte have been well-documented during the firm's representation of the accountancy firm on the mammoth BCCI liquidation. Lovells remains close to Deloitte, picking up former partner Richard Olver as its chief financial officer. Slaughter and May also has ties to Ernst & Young through Railtrack's insolvency. Though A&O's insolvency team has been low profile this year, the firm underlined its reputation in 2007 after being appointed by Ernst & Young as administrator on the £2.6bn restructuring of Metronet.