Australian law firm Clayton Utz has instituted a hiring freeze and will consider reducing employee hours if economic conditions worsen.

"The business is holding up well for now but concern as to workflow is increasing, particularly in our private sector transactional areas of practice," managing partner Rob Cutler said in a statement on the firm's response to the COVID-19 economic crisis.

The firm has taken a few "initial actions," including a hiring freeze, redeploying some workers and inviting support services employees to purchase additional special leave over the next three months.

"Maintaining adequate cash flow will be a real issue given our expectation is that clients will be looking at their own finances and may delay bill payments," Cutler said.

"While our priority is to keep our people, and keep them actively employed, if conditions worsen for us then we may look at other measures such as reduced hours."

Clayton Utz is one of Australia's "Top Six" law firms and one of only two to remain independent.

Its exposure to the downturn in spending by private sector clients is somewhat cushioned by its strong public sector practice, both for the federal and state governments. The firm is the largest provider of legal services to the Federal Government outside of the Australian Government Solicitor's office.