Herbert Smith Freehills is dominating the market while global firms have slid in competitiveness and quality, according to the Legal500 rankings of firms across the Asia-Pacific.
Among international firms, Allens has dropped from being recommended by clients as a top tier firm almost across every category to now only gaining recognition in one this year - restructuring and insolvency.
Meanwhile Herbert Smith Freehills continues to dominate the market, including in banking and finance, capital markets, dispute resolution, competition, corporate and mergers and acquisitions practices. King & Wood Mallesons are not far behind and Ashurst and Clayton Utz have also performed strongly.  
The rankings are based on an assessment of the strengths of practice teams and is compiled from client feedback and submissions from law firms.
George Beaton, executive chairman of Beaton Research + Consulting, said while there was positive momentum displayed by Herbert Smith Freehills, on the flip side, the weak showing of some major international firms was surprising, particularly in areas such corporate, mergers and acquisitions, and dispute resolution. 
"Of interest is the strong, relatively speaking, representation of women in competition and trade with five of the 14 named practitioners being female," Mr Beaton said, adding that it could be the result of outstanding women role models.
Others areas such as projects and tax had no women cited.
Allens head of sectors Emma Warren said it did not participate in the survey and the firm was optimistic about its outlook for the next 12 months.
She said an improvement in the United States economy and a lower Australian dollar resulted in an uptick in mergers and acquisitions and capital markets, and it expected this pipeline of work to continue.
The recently signed free trade agreements would also create opportunities in a range of sectors, including agriculture, renewable energy and healthcare, she said.
"The main challenge for all law firms is to be properly positioned to take advantage of these opportunities. We believe that Allens is ideally placed to take these opportunities," she said.
One-profit pool partnership model working
Herbert Smith Freehills joint chief executive Mark Rigotti said globally things were going better for the firm and clients liked its "one-profit pool partnership" business model because they found it easier to understand than other firms with different structures.
"We are also more externally focused on our clients than we have been in previous years, that helps drive better results," Mr Rigotti said. "All the internal things you can focus on or fight about can be distractions."
He said the firm was committed to maintaining genuine diversity in thought, experience and perspective across the organisation.
Among the key challenges to law firms going forward was the cost-pressures on clients, market disrupters and macro-economic factors.
King & Wood Mallesons managing partner in Australia, Sue Kench, also attributed its strength to its client-centric strategy and attraction of good quality lawyers.
Ms Kench said the firm was focused on domestic and international growth, but finding it in a flat market was challenging for firms.
"Firms must compete on more than cost - bring value and relationships to life for clients in real and tangible ways," she said.
Ashurst chair Mary Padbury said the firm maintained a clear strategy and was constantly looking at ways to improve its efficiency and new ways of delivering services. It was also focused on helping clients improve their efficiencies by using technology such as contract automation.
Clayton Utz's chief executive partner, Robert Cutler, said similarly Clayton Utz's clear strategy and development of relationships with international firms that did not have tie-ups with other Australian firms improved its performance.
He said the firm was focused on improving client service and one challenge for firms was introducing alternative billing methods that gave clients greater cost certainty as well as value while maintaining profitability.
"The best firms attract the best people. That's another challenge we are putting at the top of our list going forward," Mr Cutler said.