CITY firm Slaughter and May is to close its Frankfurt office three years after it opened in the city.
The two resident lawyers, partner Graham Childs and assistant lawyer Peter Carstensen, are returning to London in April when the office shuts.
Partner Charles Randell, who originally opened the office, says the firm concluded "if you have an office and you want to expand, the only way is by practising German law".
He says the office was originally opened as "a small representative office practising English law".
"It never had more than two lawyers. Our objective, which was against the background of German reunification and the feeling that Frankfurt was going to become a major international city, was to have a toe in the water to see what opportunities there were for us."
Slaughter and May intended to review the situation after a few years to see if the office was a sensible use of resources, Randell says.
Commenting on what Slaughters had achieved during its time in Frankfurt, Randell says: "We understand the market now a lot better than we did then.
"We did do some good work there. I was in Frankfurt for two years and the kind of work in that period was very satisfactory. However, we have to assess where we are now."
Competitors say that they are not surprised at the departure. One says: "People were surprised that Slaughters went to Frankfurt in the first place. They had a pretty small office. One sees Linklaters & Paines, Freshfields and Clifford Chance around, but you never saw Slaughters around in the same way or heard people talking about them."
Another rival says that although Slaughter and May had a practice similar to that of Linklaters in Frankfurt, "Linklaters & Paines had managed to attract a lot of work from their clients like Merrill Lynch".
Frankfurt is widely acknowledged to be a difficult market for foreign lawyers and a number are known to be reviewing their operations.
Slaughter and May becomes the second major firm to exit the Frankfurt scene in recent times.
Last year, US firm White & Case also closed down its office while Skadden Arps Slate Meagher & Flom has scaled down the level of its operations in the city.