The listing - which places Ashurst behind Slaughter and May and Linklaters & Paines, but ahead of other blue-chip firms such as Freshfields and Clifford Chance (the City's largest) - was compiled on the basis of surveys with solicitors and clients and the opinions of the editor, John Pritchard.
Ashurst's performance in what is regarded as a key listing demonstrates that, while size is a key factor in gaining this type of work, 'biggest is not necessarily best and there are many mid-size and small firms that have excellent commercial practices', Mr Pritchard said.
The success of the smaller firms is partly due to their ability to offer a cheaper service, increasingly important in the ever more competitive legal market.
This is also fuelling the trend for commercial clients to use provincial firms for work previously done in London.
ICI recently appointed Hammond Suddards, a firm based in Yorkshire with a London office, for all its litigation. Mr Pritchard sees evidence of a general trend towards cutting fees by taking routine work away from the City.
The survey also finds evidence of increasing client sophistication forcing firms to move away from adding a percentage mark-up to their hourly charge-out rates and, in some cases, to trim prices.