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North East litigation specialist Crutes has lost the head of its employment team, Tim Smith, to local rival Ward Hadaway.
It is understood this has caused the loss of one of its key health service clients, Northumbria Health Care, to Eversheds.
Smith, who will join Ward Hadaway in the New Year, is currently on gardening leave. His departure is a blow to Crutes' ambition to widen its practice from its once-core base of insurance litigation.
Crutes confirmed Smith's departure "to pursue new career opportunities", adding that it was "moving the practice more towards the commercial sector" and recruiting accordingly.
Crutes was axed from the NHS Litigation Authority legal panel in 2001 and, in the words of one local rival, "never really got over that". It is believed to have lost clients more recently in relation to equal pay cases, for which Smith is particularly known.