Milbank Tweed Hadley & McCloy may be on the verge of closing its Moscow office, becoming the third foreign firm to pull out of the region in the past year.
According to Philip Fletcher, London managing partner at Milbank Tweed, the firm's management is undertaking a "serious" review of the four-lawyer Moscow office.
The firm is examining a number of options regarding the future of the office. "We can not discount the fact that the office might be closed down," he says.
Only a month ago, Eversheds announced that it was dissolving its Moscow office, while in September 1999, Mayer Brown & Platt also pulled out of the region.
Other firms, too, are scaling down, including US-based Baker Botts, which recently lost the deputy head of the office to Lovells, leaving Alexander Loginov - the one remaining lawyer - to run the depleted practice (The Lawyer, 7 August).
Fletcher says that the market has been slow to recover from the Russian economic crisis which hit the country in 1998, adding that it has profoundly affected the amount of capital market and project finance work the firm has undertaken since then.
He says: "It is a question of when [the economy] will resume. We are looking at what we can do, and we need to decide what the long-term proposition is."
Fletcher says that at present the firm is sustaining its office on "work-out work, such as restructuring and helping people fix their problems".
Holly Nielsen, the current head of Milbank Tweed's Moscow office, joined in 1997, and the firm promised that it would recruit more lawyers into the practice.
But Milbank Tweed's Moscow office has continued as a small operation, with only two of the four lawyers practising at the firm full time.
Capital markets is one of the main practice areas to have suffered as a result of the Russian crisis.
In July, Philip Charlton, a securities and banking partner at Linklaters & Alliance's Moscow office, transferred to its Poland office. According to sources, this was a move based on the lack of capital markets work in the region.