A little ambition can be a dangerous thing. As Legal Week recently reported, Hammonds has kicked off a review of its London arm, the practice that the then Hammond Suddards launched with such high expectations more than a decade ago. News of the review coincided with outside claims, vigorously denied by Hammonds, that the firm is moving to downsize the practice, in part to cut considerable property costs incurred by unused London office space.

The amount of unused real estate will further increase if, as expected, Hammonds faces further senior departures when equity partners are allowed to resign again on 31 March.

It is a sad state of affairs for the profitable regional leader that had such promise in London, but many argue that the roots of Hammonds' current woes are inextricably linked with the capital. Certainly, the early recruitment of a talented but individualistic band of lawyers, often in specialised practice areas too divorced from Hammonds' full-service roots, created an unstable foundation that has proved tough to build on. By being over-ambitious, the firm failed to make the early running, as its disparate City big-hitters walked out the door in the late 1990s.

Hammonds observers also brand its 2000 takeover of Edge Ellison, which was driven by the desire to acquire the Midlands firm's respected City arm, as a resounding failure.

So much for history. What does Hammonds' London arm circa 2006 bring to the party? Even for a firm that has suffered nationally, the answer is: not as much as it should. Generating about £40m in revenue, the 55-partner practice lags well behind national rivals, although Hammonds claims a 12% rise in revenue last year as a sign of recovery.

The cream of the office's recent work includes advising Aston Villa on its £62.6m takeover, acting for Darius Capital on a £49m buy-out of Austin Reed and advising Jabil Circuit on an acquisition of PDQ Manufacturing. It is not an inspiring set of work and Hammonds-watchers will know that Jabil and Villa are Midlands relationships, which worryingly suggests that Hammonds is shipping work in from the regions.

It also appears that the firm has failed to play to its commercial strengths in the City in mid-market private equity, where historically Hammonds enjoyed a reasonable brand. Even more damaging was the loss of pace on the Alternative Investment Market, a hot sector in which Hammonds had been in on the ground floor only to later lose market share following senior departures. Likewise, Hammonds has missed the boom in the City's real estate legal market, a practice area that plays comfortably to national firms and one that has proved dynamic enough in recent years to drive far more profitable firms than Hammonds.

Set against that, Hammonds does have commercial practices in London that even critics concede are solid businesses, including employment, pensions and tax, and the firm stresses that companies such as WPP, Marriott International and Morley Fund Investments are still major City clients. But what is lacking is a coherent team that can grow in London. All of which gives London chief Robert Wegenek a daunting, but frankly necessary, task. If Hammonds cannot face cutting its losses in London – and it can't – it should at least come up with a very clear idea of what it is trying to achieve. That will surely be modest but hopefully achievable targets and decisive action. After all, the problem with biting off more than you can chew is that it ultimately leaves you hungry.