Lawrence Graham is turning its back on two partners and around £1m worth of fees in the closure of its defendant personal injury practice.
Partners Elizabeth Carr and Stephen Phillips will take their biggest client Norwich Union and move to Morgan Cole's Croydon office.
They will take a team of four assistants and two secretaries with them to their new firm.
Lawrence Graham's managing partner Bill Richards describes the practice as "marginally profitable to unprofitable". He says it is not economical for the firm to carry on doing the work out of London. "It's an economic decision. We just don't think that doing personal injury litigation work in bulk is economic for a firm like ours.
"As everybody knows, the insurance companies have been driving the rates down and it's increasingly been dealt with outside London."
Lawrence Graham also carries out professional indemnity and product liability work for Norwich Union, and it is understood that the client has no plans to change.
Carr says: "Morgan Cole is a panel firm of Norwich Union, so it's a happy move. It's easier to do defendant insurance work outside the City because there is an element in any repeat business that providers of that work look for savings."
Morgan Cole's Croydon office is being branded as the firm's personal injury, employers liability and general insurance flagship.
At the beginning of the year, the office took on a team of nine lawyers from now defunct City firm Edward Lewis, including two partners. With the new additions, the practice will boast five partners and 12 other lawyers. It is headed by partner Mark Fanning.
Morgan Cole's divisional director for insurance Iain Tenquist says: "With this acquisition we are one of the top five general insurance players, and our objective is to move up from fifth and continue onwards with acquisitions and natural expansion."