Travers Smith Braithwaite is closing its Isle of Man office by next January after admitting the 11-year experiment has been rendered redundant.
The office opened in 1987 to service the City-oriented needs of six clients based on the island. But in recent years, it has been focusing more on practising Isle of Man law.
The closure means no City firm is represented there.
Partner Mike Pinson and senior assistant Jenifer Stanley are joining Manx firm Cains in the corporate and commercial department. Local regulations mean they cannot join as partners but a Cains spokesman said they would be "senior commercial lawyers".
A third lawyer, Robert Quayle, who set up the firm, is staying on the island but is not thought to be joining another firm.
Pinson said: "For several years, Jenifer and I have been practising Manx law, advising both local clients and parties involved in multi-jurisdictional transactions. We concluded with Travers Smith that the move would enable us best to satisfy the need of existing clients and develop new business relationships."