Marsh UK will cut 280 jobs as part of sweeping measures to cull 2,000 members of its global workforce.
UK chief executive Bruce Carnegie-Brown said the cuts were as a result of "the realities of softening markets and changes to the business model as a result of the civil complaint filed against Marsh in the US by the New York attorney general".
But sources said that Marsh will pay its "key" directors and staff extra bonuses next year to retain them.
Meanwhile, the investigation by law firm Freshfields into Marsh's UK business practices is expected to report its findings by the end of November.
It is understood that Marsh executives will then pass the report to the FSA, which they hope will result in the regulator giving the broker its minded to authorise letter.
A source close to Freshfields said that it has been given an "access all areas" pass into Marsh, involving checking files, emails and talking to Marsh clients.
But, the source said, it was Marsh's own internal investigation that uncovered damning evidence leading to the dismissal of senior vice-president Julian Taylor for commission-related misconduct.
This week its US parent, Marsh & McLennan Companies (MMC), forced out Marsh Inc president and chief operating officer Roger Egan, and Christopher Treanor, Marsh Inc's chairman and chief executive of global placement. General counsel William Rosoff also stepped down.
Since Spitzer dropped criminal charges against MMC, banks have re-opened lending agreements with the company. It is understood that Marsh has negotiated banking extensions until the end of December but then must renegotiate its long-term position.
Sources said Marsh is "mindful" that Spitzer could fine the company but as yet no figure has been set.
One source said: "Marsh has put aside $230m from its last quarter market service agreements (MSAs) into a pot ready for any fines. There is no indication yet as to whether that is enough or not."
Sources close to Marsh refuted rumours that the UK division was planning an MBO of the business. But it is understood executives of MMC's reinsurance broker Guy Carpenter are keen to pull off an MBO.