Around 50 UK lawyers at Lehman Brothers are searching for work in the wake of the bank's shock bankruptcy filing at the weekend.
Specialist in-house recruiters are now working in and around the bank's Canary Wharf offices amid widespread expectations that Lehman's 5,000 UK staff will be made redundant.
Recruiters working with Lehman lawyers said that there had been no formal notice of redundancy for the group's UK lawyers but it is expected that a UK legal team estimated that 50 lawyers will lose their jobs.
Last year Lehman had a total of 145 in-house lawyers, headed up by general counsel Thomas Russo.
As news was being digested of the bankruptcy of the 158-year-old investment bank, serious doubts have been raised at whether many UK staff will even be paid this month.
As revealed yesterday by legalweek.com, Linklaters, Freshfields Bruckhaus Deringer and Clifford Chance (CC) are among the firms to take roles on the UK insolvency procedure, which is being overseen by administrators PricewaterhouseCoopers.
Despite the gloomy reality for Lehman lawyers hunting for jobs in a depressed market for banking lawyers, it looks likely that many law firms will be interested in recruiting experienced legal staff from the bank.
Notably, a stream of firms, including Simmons & Simmons, K&L Gates, Brown Rudnick and Bingham McCutchen have this year recruited senior lawyers from Bear Stearns since the investment bank's fire-sale to JPMorgan earlier this year.
Senior Lehman lawyers based in London include Elizabeth Lee, the highly-regarded lawyer who joined two years ago from General Electric to head up the bank's European legal operation.
Ricky Mui, legal director and banking specialist with recruitment firm Robert Walters, told Legal Week: "Competition for this pool of talent will undoubtedly be high across the financial services and commercial sectors.
"In direct response to the volatility of the financial sector, many banking lawyers are actively looking at career options outside the financial services sector, with many heading back to private practice or considering careers overseas in areas such the Middle East," he added.
Sophie Spencer, legal consultant at Barclays Simpson, commented: "At this stage, it is hard to say what effect this will have on the market, but in tighter market conditions, it will be difficult for everyone to find a new job quickly in London. Those individuals with pure investment banking backgrounds are likely to find it more difficult than those who have broader skill-sets.
"Several candidates affected by this are also considering making a move abroad to work. We are currently experiencing demand for qualified banking lawyers in locations such as Dubai, Bahrain, Abu Dhabi and offshore locations."
Meanwhile, as legal advisers scramble to react to the dramatic events in the banking world in recent days it has emerged that CC has retained a role to advise Barclays on its interest in purchasing assets from Lehman.
CC, which had been advising Barclays on an abandoned bid to acquire the whole bank, is understood to be fielding a team that includes corporate partners Guy Norman and Patrick Sarch.
Lehman panel firms will also be digesting the news of its bankruptcy. European panels firms include Simmons & Simmons, Linklaters, Allen & Overy, Freshfields, Ashurst, Lovells and Weil Gotshal & Manges.
Legal Week and its US sister titles will be keeping readers informed of the latest developments as they emerge.
See Legal Village: A dark mood on Wall St for more analysis.