UPDATE: 3/5/13, 7:00 p.m. EDT. Barnes & Thornburg has hired Dorsey labor and employment litigation partner Roy Ginsburg in Minneapolis.

With new managing partner Ken Cutler preparing to jet to London as part of a firmwide confidence-building tour, Dorsey & Whitney—whose gross revenue dropped for the fifth straight year in 2012—lost its tax practice Monday in the U.K. capital to local commercial litigation boutique Hage Aaronson.

As first reported by U.K. publication The Lawyer, the former Dorsey lawyers joining Hage Aaronson are Simon Whitehead, who served as Dorsey’s local tax head, partner Paul Farmer, solicitor and special counsel Robert Waterson, and barrister Philippe Freund. None of the four immediately responded to after-hours requests for comment about their decision to leave Dorsey.

News of the defections came the same day that the Minneapolis Star-Tribune reported that Cutler was bound for London on a preplanned visit to Dorsey’s office in the city as part of a broader effort to shore up confidence during an unsettled time for the 101-year-old Am Law 100 firm.

Cutler’s London foray comes a little more than two months after he began a three-year term as managing partner, which as The Am Law Daily reported in December, he was tapped to fill following the abrupt departure of predecessor Marianne Short. Elected to head Dorsey in 2007, Short remains one of the few women to lead an Am Law 100 firm, one she left in November to become general counsel of UnitedHealth Group.

A transactional partner and 39-year Dorsey veteran, Cutler took the reins at Dorsey two months after the firm brought on its first-ever chief financial officer in Heller Ehrman alum Richard Holdrup, whose hire came three months after Dorsey laid off 20 support staffers, 12 of whom were from its Minneapolis headquarters, according to our previous reports.

Those cuts represented at least the second round of layoffs at Dorsey since the onset of the global economic downturn in 2008. The firm previously trimmed 55 staffers from its ranks in early 2009. In the years that followed, the number of lawyers at the firm also dropped, falling from 670 in 2008 to 531 in 2012, according to annual attorney head count data compiled by sibling publication The National Law Journal.

Dorsey spokesman Bob Kleiber tells The Am Law Daily that while the firm is sad to see its former London colleagues leave, he notes that no one is irreplaceable. "The tax litigation practice in our London office, while very successful, was also a very specialized practice that was not integrated with our advocacy and transactional practices across our platform," he adds. "It was a detachable piece of our presence in London with no client overlaps, and its loss will not have a significant negative impact on the firm."

The Am Law Daily caught up with Cutler via email as he prepared to fly to London on a trip that had been planned for some time and was not in response to the departures of the tax team to Hage Aaronson. Cutler says Dorsey has no plans to conduct any further layoffs and that the firm is currently focused on growing its mid-market M&A, litigation, and health care practice areas.

The firm, he adds, also wants to continue expanding in Asia, where it formed an alliance in Shanghai with local firm Martin Hu & Partners in late 2011. Given that he has only been managing partner for about eight weeks, Cutler says the details of those plans are currently being worked out with Dorsey’s management committee.

Asked about potential merger partners—Dorsey’s Minneapolis-based rival Faegre & Benson merged last year with Baker & Daniels in a move that effectively doubled its gross revenue for 2012—Cutler says that his firm is "always open to strategic and cultural fits but we are not in any current discussions."

Dorsey has made some key lateral hires of late, most notably adding a five-lawyer bankruptcy team to its Palo Alto office with the mid-January acquisition of Silicon Valley bankruptcy boutique Murray & Murray, according to a story by sibling publication The Recorder. (Murray & Murray serves as local counsel to the trustee in the bankruptcy of now-defunct Howrey.)

Dorsey’s Palo Alto outpost also added patent and life sciences partner Scott Smith, a former head of the local office of Knobbe Martens Olson & Bear, and former Morrison & Foerster labor and employment partner David Murphy in 2012. Amid the collapse of Dewey & LeBoeuf last year, Dorsey also picked up veteran litigation partner William Primps in New York, as well as corporate partner Catherine Pan, a former Goodwin Procter associate.

The firm’s other 2012 additions included three litigation partners in Salt Lake City—Bryon Benevento, Dan Larsen, and Kimberly Neville—from Snell & Wilmer and a new Toronto office head in corporate partner Richard Raymer, the former head of the Canada practice at Hodgson Russ. So far this year, Dorsey has hired construction and government contracts partners Traeger Machetanz and Jonathan DeMella in Seattle from local firm Oles Morrison Rinker & Baker.

At the same time, Dorsey has also suffered its share of defections. Morgan, Lewis & Bockius hired former corporate partners Ellen Bancroft and Bryan Gadol and of counsel Joo Ryung Kang in Orange County, California, in January, while Venable picked up environmental regulatory partner Kathryn Floyd and of counsel Jay Johnson last month in Washington, D.C.

Those losses come on the heels of a spate of 2012 defections that included a six-lawyer IP team in Minneapolis jumping to local firm Winthrop & Weinstine; litigation partner Steven Allison and corporate partner David Hayes in Orange County decamping for Crowell & Moring and Haynes and Boone, respectively; former white-collar crime and civil fraud practice head William Michael Jr. joining Mayer Brown in Chicago; and Christine Swanick, a former cohair of Dorsey’s Indian law group, leaving for Sheppard, Mullin, Richter & Hampton in New York.

William "Billy" Martin, a former Howrey litigation partner who was a high-profile hire by Dorsey in March 2011, left the firm less than a year later to form his own Washington, D.C.–based shop Martin & Gitner. Martin took with him a roughly $500,000 legal services contract to advise the House Ethics Committee in its investigation of Representative Maxine Waters, who was cleared last September.

Dorsey corporate partner Jamie Benson in London also left the firm last year to join the Singapore office of Duane Morris & Selvam. The recent departure of the London tax team leaves Dorsey with 24 lawyers in the city, where the firm has had an office since 1986.

While Dorsey has been hurt by the loss of some client work over the past few years—the state of Minnesota dumped the firm as its bond counsel in 2011—Cutler says that the bond business was actually very minor. He adds that Dorsey is poised to pick up work on other matters, including advising UnitedHealth, where his predecessor is now the top in-house lawyer for the leading Minnetonka, Minnesota–based health insurer.

Richfield, Minnesota–based big box electronics retailer Best Buy, which Dorsey has advised in the past, saw a proposed $8.8 billion takeover bid by the company’s founder and a trio of private equity firms collapse last week, possibly preserving another key client relationship.

Cutler says that Dorsey’s international disputes work has increased significantly—the firm is currently representing the state-owned Argentine national bank in litigation with sovereign debt holders—and notes that the firm also won the mandate last fall to serve as general counsel to the Minnesota Sports Facilities Authority on its plans to build a new stadium for the National Football League’s Minnesota Vikings. (Click here for Dorsey’s proposal on that matter.)

Dorsey is also poised to make more lateral hires in the future, says Cutler, noting that only last week it hired former Fredrikson & Byron corporate partner Brian Moore, who does a significant amount of M&A work for Medtronic, a suburban Minneapolis–based medical technology company.

Over the next few weeks Cutler will be visiting other Dorsey offices, including a stop later this month in Anchorage, where the firm opened up shop in 1999.