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Highland Council in the north-west of Scotland has made its legal director Marion Notman redundant and merged the legal team with another department as part of a cost-cutting restructuring.
The council is having to make savings of £14m and councillors have decided to achieve this by merging departments and disposing of 25 senior managers.
The deputy chief executive was one of the losers in the restructuring.
The local authority's public relations manager, Gordon Fyfe, said the law and administration department and personnel services were being merged into one corporate services department and the heads of both were interviewed for the new job of combined head. The personnel director, Alistair Dodds, won the job.
Notman, who was not available for comment, is said to have accepted a severance package. She joined the council from Falkirk when it was formed under local government reorganisation last year.
The merger operation has saved the council £1m. It is not clear how the rest of the money will be saved.
Notman's workload will be taken over by Malcolm McRae, the head of legal services. He said he was not aware if any date had been fixed either for Notman's departure or the departmental merger.
The council has 25 in-house lawyers spread over nine offices. McRae said the job cuts were made among the directors because the council hoped to make big savings by getting rid of the highest paid. He added that the tight budget was a result of funding squeezes by central government.
McRae said: "Those of us at senior management level anticipated that there would be some structural changes. This is only the beginning."