As Legal Week went to press on the final issue of last year, the end of 2011 was starting to look a lot like the closing days of 2008. A global economy slowing, chaos in financial markets and a huge overhang of debt in all directions – well, you hardly need me to draw a picture. Confidence appeared to be visibly draining as reports emerged of a magic circle firm set for a restructuring (then Clifford Chance, this time Linklaters).

It had reached the point where the question on the minds of many partners was how much the opening months of the New Year were going to look like the equivalent period in 2009, when the City was gripped by an unprecedented wave of job cuts and restructurings.

Step forward a few weeks and it's a mark of how far expectations have fallen in the 'New Normal' that the outlook appears less apocalyptic than in darkest December.

In part this is thanks to developments in the wider economy – including co-ordinated intervention from central banks, recovery bedding down in the US and a run of less gloomy economic indicators. But more specifically, there has been a feeling among law firms that the slowing deal market has not yet repeated the 'falling off a cliff' moment seen in the wake of the banking crisis in 2008. Times are tough – they have been for three years now – but so far the substantial cuts to the cost base of law firms are keeping most firms on solid ground.

Our confidence poll this week is striking in this regard – while partners believe growth prospects have weakened since the summer, 82% are still forecasting growth at their own firm over the next 12 months. These figures are far ahead of the numbers we polled in January 2009 – only 45% then thought their firm could grow income over the next 12 months.

Furthermore, only 6% of partners are expecting sizeable staff cuts at their firms this year. Also interesting in this regard are figures from Mergermarket, showing bid activity globally moved upwards in 2011 and – for all the gloom – remaining well up on 2009 levels.

Those numbers do contradict the consensus view of how hard it is out there. Part of the discrepancy between received wisdom and a less doom-laden reality is that law firms have for three years been lectured on how awful their outlook is – claims that in many cases have been exaggerated and some have proved plain wrong. (Anyone remember the widely-reported claim about 10,000 solicitors losing their jobs?)

Nevertheless, it's going to be an unforgiving market. More firms are (rightly) looking for bold steps rather than waiting for the days of plenty to return and senior law firm leaders are beginning to actively plan for pressure from bluechip clients to unbundle buying in many gory forms. But the good news is that it could have looked a lot worse.