The new firm, which is yet to be named, is due to open at the beginning of October this year and will be headed by departing Piper Alderman partners Tracey Kerrigan, Mark Keam, John Hiatt and Neville John.

According to Phelps, the creation of the new firm reflects the national firm's overall strategy to focus on dispute resolution, corporate law, employment relations and property and projects.

"There was a divergence of direction. Nationally, we're trying to concentrate on a corporate/commercial practice with high-end litigation," Phelps told Lawyers Weekly. "It's incompatible to have a state-based workers compensation group at the same time - we're heading in different directions."

The decision to launch the specialist workers compensation firm, according to Phelps, has been brewing for a long time.

"Workers compensation work has been under pressure for a long time ... the group itself has gradually reduced in terms of number of partners and number of lawyers in the area over the years and it just got to the point where it was no longer viable within a big organisation like us. It had to go specialist," said Phelps. "It's sad ... but it's the advent of pressure on rates and practice areas. It's happened in insurance practices all over Australia."

Phelps, Keam and Kerrigan have a long history together, having gone to university together and started at Piper Alderman within a week or two of each other, making it a "bittersweet parting" for the group.

"We are remaining best friends. Of the four partners [leading the new firm] we've got over 100 years of experience between us with Piper Alderman," said Keam. "We've had an extremely long association so there's a fair degree of loyalty between the two firms and that's been really helpful through the process."

Although the firm won't be officially operating for another few months, Keam said the firm's short-term priority is to ensure the effective transfer of clients.

"We've had a 100 per cent take-up in that regard," he said. "Clients will see little change from what they're currently experiencing in a day-to-day way."