Midlands firm Lee Crowder has been dropped from 3i's panel after 50 years.
The move comes after a review at the venture capital house which, in 1996, accounted for 28 per cent of the law firm's turnover.
But over the past few years the firm has braced itself for the decision, which has been rumoured for some time.
Expansion into other areas has now decreased Lee Crowder's reliance on 3i work to the point where the predicted turnover from the company would have been only 3 per cent of overall turnover this year. Lee Crowder managing partner Stephen Gilmore says: "We have been through a tender process and the tender was unsuccessful - these things happen. It's not really the significant blow that it would have been a few years ago."
With 22 partners, Lee Crowder has significantly fewer resources than local Birmingham rivals Pinsent Curtis and Wragge & Co, for example.
Birmingham rival Wragge & Co now steps into Lee Crowder's shoes, having enjoyed a close relationship with the company for many years. Pinsent Curtis will also continue to offer advice in Birmingham.
The majority of the work will now be handled by Wragge and Co, which according to major corporate partner Richard Haywood, is "delighted" to have been appointed.