Lovells is to close its seven-partner Chicago office after it underperformed for a number of years.
While the plan is still subject to partnership approval it is expected that the office will close at the end of October, six months after the firm’s merger with Hogan & Hartson goes live.
A spokesman for the firm said the office, which has a total staff of 47 and focuses on reinsurance litigation and arbitration, has been under review for some time and the closure is not related to the merger.
In a statement Lovells managing partner David Harris (pictured) said: “For many years since its opening in 1995 the Chicago office produced strong results, focusing on major disputes and arbitrations, primarily in the reinsurance market.
“This is an area which has seen changes in work patterns and the office has been affected by a number of significant conflict situations. Despite the best efforts of partners in Chicago and elsewhere, this has had an impact on the office’s overall performance in recent years and the position is not expected to change.
“This is a Lovells decision, taken following consultation with the Chicago partners who support it. Hogan & Hartson are aware of and understand the reasons behind it.”
The conflicts faced by the office are understood to be between clients of Lovells, which has a strong insurance industry focus, rather than between Lovells and Hogan.
The firm is currently in discussions with its Chicago partners to see whether there is scope for them to relocate to another office, although there is no guarantee that this will be possible.
The firm faced a similar situation in Berlin in 2006, when it decided to close its local office (30 August 2006). At that time the firm’s Berlin partners were given the opportunity to transfer to another German office.
Last week, the bulk of Hogan’s Berlin office announced that it would be forming an independent firm rather than take part in the Lovells merger, citing potential conflicts as the main driver (23 March 2010).
Earlier in the month Hogan’s entire Warsaw office jumped ship to K&L Gates after Hogan and Lovells decided their combined operations would be too large in the city (8 March 2010).