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July 30 (Bloomberg) — Cadwalader, Wickersham & Taft, the New York-based law firm founded in 1792, will fire 96 salaried lawyers in the U.S. and London because of “a significant slowdown” in real-estate finance and securitization work.

“Cadwalader has adapted to this market reality,” the firm said today in a statement sent by spokeswoman Claudia Freeman. Cadwalader fired 35 lawyers in January. The latest round of cuts will leave the firm with 580 attorneys, the same number as in January 2006, it said.

“We’re in the process of talking to lawyers here,” Cadwalader Chairman Chris White said in an interview. He declined to comment on whether fired attorneys will receive severance pay through the end of the year, as the Wall Street Journal reported.

At least a dozen law firms have cut lawyers and staff since the U.S. subprime-mortgage market began to collapse, halting work in structured finance and real estate. Structured-finance practices advise clients on complex transactions that transfer risk, such as the securitization of mortgages or credit derivatives.

“It appears that the real estate finance and securitization businesses will remain slow for the foreseeable future,” Cadwalader said. The issuance of commercial mortgage-backed securities has shrunk to “a small fraction of previous levels” after tripling from 2003 to 2007, the firm said.

First Since 2001

Law firms are dismissing attorneys for the first time in seven years. When the technology bubble burst and the economy slowed after the Sept. 11, 2001, attacks, New York-based Shearman & Sterling dropped about 70 associates and Philadelphia-based Morgan, Lewis & Bockius fired about 50.

Current conditions are similar to those of 2001, when the market declined after firms went on a hiring spree to handle the high volume of work.

In May, Chicago-based Sonnenschein, Nath & Rosenthal fired 37 lawyers and 87 staff members, including secretaries and paralegals. The 700-lawyer firm terminated six partners, four experienced salaried attorneys called of counsel and 27 associates, mostly in real estate and litigation.

New York’s Thacher Proffitt & Wood said in November it would fire 24 attorneys at its structured-finance and real-estate practices. London-based Clifford Chance that month cut six lawyers from its structured-finance practice.

After Cadwalader terminated 35 attorneys in January, Greg Markel, chairman of its litigation committee, said in an interview the firm wouldn’t fire any more lawyers in real estate finance and securitization.

`Profitable’ Practices

“While the business has slowed down and may never return to the level of where it was at its height in 2007, we expect these to be highly profitable and viable practices going forward,” Markel said at the time. “They were very highly leveraged because of the level of business.”

The firm also transferred about 25 attorneys from real estate finance and securitization to different practice groups in January.

Markel didn’t return phone calls today seeking comment.

Cadwalader’s clients include Northwest Airlines Corp., Morgan Stanley, Pfizer Inc., Procter & Gamble Co. and Merrill Lynch & Co. Inc.

The firm is the seventh-most-profitable U.S. law firm, with partners earning an average of $2.7 million in 2007, according to the American Lawyer, a trade magazine. It has offices in New York, London, Charlotte, North Carolina, Washington and Beijing.