Hill Taylor Dickinson is to close its three-lawyer Hong Kong shipping office following the departure of partner Nick Mallard to Dibb Lupton Alsop's practice in the city.
Mallard left the firm on the heels of partner Nigel Binnersley, who joined a US firm in the summer.
It is believed that Mallard and his Hill Taylor partners subsequently disagreed over plans for the office's future.
A source at Hill Taylor said both parties were "trying to work out a way forward" and had been trying to "preserve the position".
However, negotiations between Mallard and Hill Taylor did not work out, but he said that the firm still had ambitions in Hong Kong, albeit in a different format, and was looking at other options.
Dibb Lupton Alsop partner Nigel Knowles said the firm had hired Mallard and two assistants to add to its shipping practice.
He said he was "very keen" to expand the firm's Hong Kong practice and that the current economic environment was the ideal one in which to fulfil this ambition because property was cheap and recruitment easy.