Months of speculation came to an end in March this year when Manchester stalwart James Chapman & Co announced that it was effectively splitting in two, with two local rivals the main beneficiaries. A majority of the 40-partner insurance specialist found a new home in the expansive embrace of Halliwells, boosting combined turnover at the national firm to more than £75m – potentially putting Halliwells among the largest 30 firms in the UK.

The agreement, which went live on 1 May, followed a merger approach by Halliwells in 2004 which was initially turned down.

"We have taken on 90% of their business, which is now being integrated," says Halliwells managing partner Ian Austin. "[And] while we are not all under one roof – which will not happen until October 2007 – their financial performance has been more than we were promised."

The demise of James Chapman as an independent entity marks the end of the road for one of the most familiar names in the Manchester market and comes during a testing time for practices specialising in insurance work.

The practice, which was probably best known for its personal injury and professional indemnity work, was among those to feel the squeeze from insurers looking to rein in fees and turning to larger regional outfits for legal advice. As a result, further consolidation is thought likely within the sector.

Indeed, Liverpool insurance specialist Hill Dickinson was this month reunited with City namesake Hill Taylor Dickinson having parted in 1989 to pursue different strategies. The combined firm has some 141 partners and will boast revenue of more than £65m.

Although James Chapman this year posted a solid set of financial results – with average profits per equity partner approaching a respectable figure of £350k – the writing may have been on the wall when the Manchester firm was cut from the advisory panel of key client AXA, leading to the redundancies of one partner and seven assistants.

The tie-up with Halliwells should at least leave the practice better placed to hang on to remaining panel spots such as that of Swiss-based insurer Zurich.

Austin adds: "It seems insurers want a real depth of offering, not just specialisation in, say, professional indemnity. You have to offer expertise in a cost-efficient manner."

Big-name Watkins makes a move to Brabners

Meanwhile, Brabners Chaffe Street also profited from the disintegration of James Chapman, as its 28-lawyer commercial group, including the firm's respected sports practice, which includes high-profile senior partner and former Manchester United FC director Maurice Watkins, opted to join the Liverpool firm.

The move continues a promising period for Brabners, which posted turnover in excess of £20m for the first time, charting a 20% increase in revenue over the last year to reach a mark of £21m.

Thanks to the acquisition of Watkins' team, the Liverpool-based firm has already gained profile-raising mandates thanks to his links with Manchester United, advising on the £18.6m acquisition of England midfielder Michael Carrick from Tottenham Hotspur and the £10.2m sale of Dutch striker Ruud van Nistelrooy to Real Madrid.

Pannone's people call time on Wacks Caller

As the James Chapman name subsided into the annals of legal history, another Manchester firm was battling for survival as northwest practice Wacks Caller saw a raft of senior departures to a northwest rival.

This time Pannone was there to pick up the pieces, with four partners – including name partner Martin Caller and litigation chief Kit Sorrell – and at least 20 further lawyers joining its ranks on 1 July, just three weeks after the deal was confirmed.

"The move is working out well," argues Pannone managing partner Joy Kingsley, with the team seeing just a couple of junior departures since the transfer. "We ended up with about 30 lawyers, primarily in litigation, property with some corporate. The team billed reasonably well in July and very well in August, which is unusual so soon after a move."

For contractual reasons, the partners joined Pannone as employed consultants, although the firm indicates that Caller, Sorrell and fellow litigation partner Michael Kennedy will enter the equity partnership "in the not too distant future".

Wacks Caller, meanwhile, continues to practise its current guise for the meantime, with mooted plans to re-launch as a corporate boutique under the name of Atticus seemingly on ice.

Blow for Watson Burton as firm loses Leeds chief

Proof that momentum can be lost more easily than it is gained came last month as ambitious northeast practice Watson Burton found its Leeds expansion plans under scrutiny for the first time.

On 31 August, Legal Week revealed that high-profile banking and finance specialist Andrew Gosnay was to quit the firm he had joined less than 18 months previously.

Gosnay, a well-known figure in the Yorkshire market, joined Watson Burton in early 2005 from the local arm of national giant Pinsent Masons.

His hire followed the announcement in August 2004 that Watson Burton was to make its first foray beyond its Newcastle heartland to launch a new office in Leeds, a market that has proved notoriously difficult to crack for firms out-side of the region's established 'big six'.

Gosnay, who also headed up the firm's banking and finance department, was set to leave the firm this month, although at time of going to press his destination was unknown.

He had been hired to spearhead the firm's Leeds launch and oversaw its subsequent expansion from a corporate finance core into insolvency, construction and employment work. His arrival was soon followed by the hire of insolvency partner and former Eversheds lawyer Graham Ridler from Deacons in Hong Kong as Watson Burton set about building up a local presence.

"We are very sorry to see him go," senior partner Andrew Hoyle told Legal Week. He added that the firm was not looking for a direct replacement: "The Leeds office is continuing to grow and it is unfortunate that [Gosnay] has left at this time, but the business is still a very good one."

However, the news that Gosnay was to quit Watson Burton is being seen as a rare setback in recent times for the expansive northeast outfit, coming in the same month as the hire of Leeds-based construction partner Bill Barton from DLA Piper.

Indeed, while Leeds remains the second-largest legal market in the UK, some have questioned what the Newcastle firm has to gain from attempting to crack a city dominated by Walker Morris, Hammonds, Addleshaw Goddard, Eversheds, DLA Piper and Pin-sent Masons.

Internally, attention is sure to be divided between the new bases in Leeds and the capital, where Watson Burton became the first Newcastle firm to secure a presence after launching a City offering in July with the hire of a two-lawyer construction team from Field Fisher Waterhouse, continuing a run of departures at the mid-tier City outfit.

Either way, without Gosnay, the challenge now seems that little bit harder.

Freeth Cartwright takes it slow in Manchester

While two well-known names were disappearing from the Manchester legal scene, one less likely entrant was making its debut as East Midlands firm Freeth Cartwright unexpectedly made the city the target of its first expansion beyond its own regional heartland.

The new Manchester branch was launched in May with the opportunistic hire of insolvency partner Joey Byrne from local boutique Turner Parkinson.

The new office, which is headed up by construction partner John May, formerly of DLA Piper, represents the latest addition to a network that features offices in Derby and Leicester in addition to its Nottingham headquarters.

"The thinking was primarily opportunistic," admits Freeth Cartwright managing partner Colin Flanagan. "[Byrne] was already planning to leave his firm and decided it was preferable to join the Freeth Cartwright empire rather than start up alone or join another firm. [However] we have thought for a long time that there are opportunities in the northwest that we could tap into if we had some sort of presence.

"Manchester is very much a focused office; from our perspective, ideally it will be a low-cost operation. We are not planning to go making half-a-dozen lateral hires and be 50 or 60 lawyers."

It remains to be seen what impression the firm can make on a local construction market that features national giants such as Hammonds and Pinsent Masons among its market leaders. For now, Freeth Cartwright will continue to concentrate primarily on its East Midlands heartland, where Nottingham firm Browne Jacobson and the local arm of national giant Eversheds form the main competition.

The firm last year posted turnover of approximately £27m and is this year on target to break £30m, while initiatives to bolster fee income further include an alliance with London construction firm Fenwick Elliott and a less formal referral arrangement with 20-partner Birmingham practice Anthony Collins.

"These opportunities are more in tune with our culture than major mergers," says Flanagan. "We want to remain a fairly tight-knit organisation [so] we have to be creative in improving our quality of work and expanding the client base."