Allen & Overy's (A&O's) magic circle rivals have reaffirmed their commitment to the Hong Kong market following this week's news that A&O has asked a number of local partners to leave the firm.

A&O confirmed on Monday (11 June) that it has cut four partners in its transactional and disputes practices, while it has also helped one further real estate partner to spin off his practice.

The five departures represent around one fifth of A&O's Hong Kong partnership, with the firm pointing to recent growth in the wider Asia region as well as a local market slowdown as the key drivers for the cuts.

However, magic circle competitors in Hong Kong say they are not currently planning any local cuts and expect any reduction in work levels to be temporary.

Clifford Chance Asia litigation head Martin Rogers said: "In relative terms there is a bit of a slowdown based on what is happening in Europe at the moment, but we see that as potentially very short-term in the context of the growth and buoyancy of the Asian economy. Greater China is a huge economy on an upward trajectory which we believe can sustain significant further growth, including in Hong Kong."

The recent slowdown has seen a notable drop-off in activity in the much-touted initial public offering market, including the cancellation of a number of high-profile Hong Kong listings.

Linklaters Asia managing partner Stuart Salt added: "There's obviously been a slowdown in equity capital markets which hits a lot of headlines, but that has not come as a great surprise to us. Generally, activity levels in Hong Kong and Greater China have been strong for us. We elected five new partners into Greater China last month, including three in Hong Kong, and have no plans for redundancies."

An A&O spokesperson said the role of Hong Kong as a regional hub had changed for the firm, which has grown its Asia headcount by 60% in the last four years. The magic circle firm announced last month that it is set to launch in Vietnam later this year, while last year it entered the Indonesia market via an exclusive association agreement with Jakarta's Ginting & Reksodiputro.

A&O was one of the earliest firms to gain a local law licence in Singapore when the first round were handed out in 2008, although talks over a tie-up with local leader Allen & Gledhill were called off in March this year.

One Hong Kong legal recruiter added: "A&O is the only firm that I've heard is [making partner cuts in Hong Kong]. It's been a bit slow early this year and there is pressure on fees, but it's not that bad. All the people that were let go [at A&O] were expats and close to or at the top of the equity."

SNR Denton Hong Kong head Keith Brandt added: "The remarkable rate at which law firms have established themselves here over the past two years is bound to have an impact on competition and work levels."