Keoghs, the specialist insurance law firm, has been forced to close its Southampton office because of a lack of new business. The office opened less than two years ago in an attempt to extend the firm's national coverage.

Keoghs said it will continue to operate out of its larger Bolton and Coventry offices, but only three of the Southampton operation's 11 fee earners will stay within the firm.

Trevor Chamberlain, head of insurance at Beachcroft Wansbroughs, a Keoghs competitor, said he saw the closure as further evidence of an ongoing trend within insurance litigation.

"Insurers are increasing their drive towards having more control over panel solicitors," he said. "They are doing this to control their expenditure and are achieving benefits by concentrating work in the hands of fewer firms."

Chamberlain said it is still an advantage for law firms to have regional offices but the success of those offices depended on the competition they faced and the relationships they had with the insurers.