Skadden, Arps, Slate, Meagher & Flom confirmed Thursday that it will close its five-lawyer office in Sydney, Australia, sometime in the next few months. One of the firm’s two partners there, Adrian Deitz, will remain in Sydney but also work out of Skadden’s existing offices in Hong Kong and Singapore, the firm said.

The affected lawyers specialize in corporate M&A and U.S. securities laws. The office opened in 1989, according to sister publication Legal Week, and in recent years has advised on some significant matters. In 2014 Skadden advised the Commonwealth of Australia and national private health insurer Medibank Private on Medibank’s $4.9 billion IPO, the country’s second-largest ever. It also advised energy trading company Vitol Group on its $2.6 billion purchase of Royal Dutch Shell plc’s Australia downstream businesses the same year.

Skadden’s retreat comes amid an extended slump in Australia’s mining industry, along with plunging commodities prices and increasing economic turbulence stemming from China’s contraction. Skadden declined to comment on the reasons for the office closure.

At least one other elite firm is also pulling back; Clifford Chance confirmed earlier this month that its Australia managing partner will leave, along with a fellow founding partner of the firm’s Australian practice, according to Legal Week. Among U.S. firms, Skadden is the first U.S. firm to leave Australia since 2013, when Dorsey & Whitney closed its Sydney office.

Australia’s legal market has seen some dramatic changes since 2011-2012, when Magic Circle and “Silver Circle” U.K. firms swooped in, merging with or affiliating with four of the country’s traditional “Big Six” law firms. In a domino effect, several U.S. firms merged with or poached from several of the remaining independents. K&L Gates merged with 283-lawyer Middletons in 2013 and now has 260 fee earners in the country. Squire Patton Boggs’ legacy firm Squire Sanders & Dempsey raided a leading local firm, Minter Ellison, in late 2011, and now has 87 lawyers in three offices, including a dozen new lawyers it cherry-picked from Piper Alderman last year.

Skadden’s departure will leave about 13 U.S.-based international firms in Australia. The largest include several Swiss verein-structured firms whose separate profit centers may ease the effect of continued economic or currency fluctuations. Norton Rose Fulbright has roughly 600 lawyers in Australia; Baker & McKenzie and DLA Piper both have more than 200. A fourth verein firm, Dentons, should be second in size among vereins with a large U.S. presence once it completes its combination with 500-lawyer Gadens this year. All the vereins provide a full suite of domestic legal services.

Among the larger nonverein firms, most still appear to be bullish about their prospects Down Under. Jones Day opened a Brisbane office, its third in the country, just last week, and now has 65 lawyers in Australia. The firm’s offices focus on M&A, project finance and project-related disputes in the natural resources, construction, transportation and agriculture sectors, Jones Day said in an announcement.

Skadden, meanwhile, was one of several other U.S. firms with small offices in Australia practicing U.S. law. Others include HoganLovells, which opened two offices last year and now has five lawyers in Sydney and Perth; Seyfarth Shaw, focusing on labor and employment; and Quinn Emanuel Urquhart & Sullivan, focusing on disputes. Seyfarth and Quinn Emanuel both entered the country in 2013. Sullivan & Cromwell, which has a six-lawyer U.S. legal practice in Sydney and a practice profile similar to Skadden’s, did not respond to a request for comment on its plans.

Several other U.S. firms insisted that they’re staying put. Squire Patton Boggs said it’s looking to grow in Australia, and recently took on additional space in Sydney to accommodate more lawyers there. K&L Gates isn’t planning any reductions, and counts the country as a key piece of its Asia platform, according to firm chair Peter Kalis. On Friday, the firm added three corporate partners to its Sydney office from Sparke Helmore Lawyers and six other partners in Australia recent months.

“Australia is strategically critical to a sound AsiaPac strategy,” Kalis said. Compared with other mining-heavy countries, he said, Australia is well-diversified, with a vibrant banking sector. “The U.S. investment flow into Australia is robust and outpaces that of any other country,” Kalis said.

Sidley Austin, which has 10 lawyers in its nine-year-old Sydney office, has seen its outbound capital markets investment practice and cross-border M&A thrive despite Australia’s economic challenges, according to firm chair Carter Phillips.

“There is plenty of money in the region looking to invest in the U.S., and I don’t see that changing anytime soon,” Phillips said. “We have no plans to shrink the office. On the contrary, we could probably expand the office, if the right opportunities were to present themselves.”

Chris Ahern, who leads Jones Day’s practices in Australia and Japan, said Skadden may have stumbled because of its focus on U.S. capital markets work. Jones Day, by contrast, is involved in a variety of practices and sectors, he said, including some billion-dollar disputes.

Despite the weakness of the Australian dollar, Ahern said, “if you’ve otherwise got a successful practice, and you’re getting the best work in the market, you can be profitable here.”

U.S./International firms in Australia, by size:

Norton Rose Fulbright
600 lawyers in Sydney, Perth, Melbourne and Brisbane.

Baker & McKenzie
296 lawyers in Sydney, Brisbane and Melbourne.

K&L Gates
260 lawyers with four offices in Australia.

DLA Piper
365 lawyers spread across five offices.

Squire Patton Boggs
87 lawyers with offices in Sydney, Perth and Darwin.

Jones Day
65 lawyers in Sydney, Perth and Brisbane.

Seyfarth Shaw
25 lawyers in Syndey and Melbourne.

Quinn Emanuel
11 lawyers in Sydney.

Sidley Austin
10 lawyers in Sydney.

Sullivan & Cromwell
Six lawyers in Sydney.

Hogan Lovells
Five lawyers in Sydney and Perth.

(Source: firm websites.)