This week we're all talking about... Linklaters' Central Eastern European offices

Linklaters' Central Eastern European offices" />Linklaters shocked the international legal market last month when it decided last week to axe its four offices in Bratislava, Bucharest, Budapest, and Prague. In their place the magic circle firm has installed virtual offices in London for places like Ukraine and Kazakhstan.

The four Central Eastern European (CEE) offices will split off from Linklaters in November, eight years after they launched, forming a single, eight-partner independent practice which will work in partnership with the magic circle firm. Jason Mogg, currently Linklaters CEE head, will lead the new firm.

Meanwhile, London capital markets partner Nick Eastwell will head up the combined emerging Europe, Middle East and North Africa (EEMENA) group, replacing offices with foreign desks in London. Two partners will be assigned to each jurisdiction in the EEMENA region, starting with Ukraine, Kazakhstan, Turkey and Saudi Arabia.

Eastwell says: Weve been looking at this for a while. The credit crunch and its impact in places like the UK and US has got a lot of our major clients focusing on this geographical region. We do a huge amount of business in these areas but we havent focused on ramping it up until now.

Eastwell is going through the process of assigning partners to countries, on the basis of their experience and specialisms. Hes already picked former Prague managing partner Francis Kucera to lead the Ukraine desk. Kucera has represented the Ukrainian government on a series of bond issues in the past.

Linklaters fervently denies that profitability played a part in the decision. Eastwell claims that three of the four offices hit high profitability targets, saying: These offices were historically extremely profitable and the decision we made has nothing at all to do with profitability. You can quote me on that.

Linklaters decision to cut offices in favour of virtual practices shows a complete change of direction for a magic circle firm. It signals that the turn-of-the-century dream to cover every inch of the globe with Linklaters lawyers has been killed by the harsh reality of managing such a complex operation.