Weightmans is losing its Manchester head of professional indemnity to Addleshaw Booth & Co as the firm undergoes a strategic review of its business.
Highly-rated partner Mike Grant is leaving insurance specialist Weightmans after four years to join Addleshaws' litigation and dispute resolution department in Manchester.
The departure comes at a time when Liverpool-based Weightmans is drawing up a strategic review of its cost structure in the face of a number of insurance companies reviewing their legal panels and the repercussions of the Woolf reforms on law firms.
It is understood that Weightmans is one of a number of firms being audited on its claims handling work by the firm's former chief executive Martin Read, who is acting as a consultant for Axa Insurance and Norwich Union.
But it is believed that Grant was instrumental in providing a "very satisfactory" audit for Norwich Union.
Mike Edge, senior partner at Weightmans, says: "Mike wanted to diversify into other areas of litigation like construction and Addleshaws has a more commercial base.
"We are disappointed but we do have a large department in professional indemnity."
Edge plans to replace Grant but says that he will be looking internally for candidates.
One source says that Grant's departure will be a great loss for Weightmans, claiming: "He is a very bright guy."
Edge also says that the firm is continuing to look for a merger partner after talks with Jacksons and Kennedys fell through in 1998.
He says: "We have had preliminary talks with people and we have some irons in the fire."
But Edge refuses to say which firms he has spoken to and whether any talks have progressed past the preliminary stage.
Addleshaws has also appointed Michael Green to its London litigation and dispute resolution group.
Green is joining as a senior assistant from Beachcroft Wansbroughs.