Hammond Suddards has hired an insolvency partner from rival Dibb Lupton Alsop's Manchester office.
John Alderton is quitting Dibbs following the impending departure of department head Peter Manning to Simmons & Simmons' London office. Manning resigned in January.
The number of partners at Dibbs' Manchester insolvency department will drop from three to one, leaving just Dermot Preston.
Alderton says: "There is a tremendous opportunity at Hammond Suddards. It has a strong commitment to developing a stronger insolvency practice.
"The firm has made significant inroads in the Manchester market and, really, the next stage of that is for the strength and depth of the team to grow."
Dibbs' former managing partner Paul Rhodes joined Hammond Suddards in Leeds to run its insolvency department. Though he is not a partner at the firm, he agreed to spend two years defining a strategy for the insolvency department and recruiting people to implement it.
Alderton estimates the north-west insolvency market is worth £4-5m a year.
He says Hammond Suddards and Addleshaw Booth & Co are vying for the top spot, and predicts Dibbs will drop to number three.
"Dibbs has got a challenging time ahead," Alderton comments.
Dibbs says the corporate recovery and insolvency department is being realigned - in the wake of the firm's merger two years ago - to concentrate on work for major accountancy firms, banks and insolvency practitioners.
"It became apparent that a number of people did not fit with the new direction, and they left," says Dibbs managing partner Nigel Knowles.
"We have, however, rec-ently been joined by a specialist insurance recovery team from Davies Arnold Cooper, led by Nigel Montgomery. More appointments are likely in the next few months.
"We are now well placed to handle the growing business in this area."