US firm Mayer Brown & Platt will shut down its Moscow office at the end of this month.
It is the latest casualty of last year's Russian economic crisis, which forced firms to re-focus, slim down or pull out.
An industry source says: "Law firms are facing the choice of expanding dramatically or withdrawing. It's a case of investing and becoming truly international, or closing down."
Mayer Brown & Platt has decided to close down operations, described as a "skeleton practice" by London managing partner Ian Coles.
Coles says: "We made a decision to finish in Moscow in common with many other service providers. We are still very committed to the former Soviet Union, but there is not enough capital markets and finance work around."
With his firm pulling out, counsel Michael Sussman, who headed the Moscow office, decided to jump ship to expanding US firm Squire Sanders & Dempsey.
Sussman says: "Obviously [Mayer Brown closing] was part of the reason for my decision."
Sussman is joining Squire Sanders' London office as of counsel, and is set to play a key role in the reorganisation of its CIS practice, which has taken over US firm Steptoe & Johnson's Russian and Kazakh offices (see page 7).
Joseph Markoski, London-based managing partner of Squire Sanders' European practice, says: "One of the advantages of having Michael Sussman moving back and forth between London and Moscow is that it will facilitate the integration process."
Christopher Roberts, Allen & Overy's Moscow managing partner who is heading back to London in October, says: "The well-publicised economic turmoil of last August has resulted in a change in focus with a dip in certain areas of work, notably in capital markets."