The management committee at US firm Dewey Ballantine has been doing its best in recent weeks to contain a PR faux pas that has threatened at times to escalate out of control.

Dewey Ballantine's decision to close its Hong Kong office (and thus pull out of Asia), revealed in the February issue of ALB, appears to be linked to the expiration of the firm's lease in The Landmark building on March 31 and an apparent disregard for the overseas venture shown by partners in New York.

This came to a head at Dewey's annual dinner at the Plaza Hotel in New York on January 31 - just two weeks after the resident lawyers were informed of the closure - where a disparaging poem about the Hong Kong office was sung.

The parody, which included the lines: "We're sending you, Hong Kong, Down the Loo, Hong Kong. You showed no gain, Now you're chow mein... You were the firm's folly and we so solly", was not received in the spirit in which it was delivered, sparking heavy criticism.

John Otoshi, managing partner of the now-defunct Hong Kong office, was the only resident lawyer at the annual dinner. It is understood that he was so upset by the comments made that he left in the middle of the evening.

Only Otoshi - who will be in Asia for a while longer - and a very junior associate who recently arrived in Hong Kong have the opportunity to return to New York with the firm, although Otoshi is said to be considering his position. No leases in The Landmark are being renewed, with the tower likely to be converted into apartments.

The incident, which has been well covered in the legal press of late, even prompted Everett Jassy, chairman of the firm's management committee, to issue an internal apology via email to all of the firm's employees.

In the apology, Jassy stated: "The song, although intended solely to poke fun at the firm for closing the Hong Kong office and not at any individual or group, was offensive and insensitive and should never have appeared in the book or been used as a song. We sincerely apologize for this.

"We are sorry and will take steps to ensure that such an incident is never repeated. To all those who have been offended and to all those who treasure the firm's reputation, once again, we profoundly apologize."

A source from within the firm, who wished to remain anonymous and who is one of the five lawyers being made redundant from the seven-lawyer Hong Kong office, admitted that the firm's annual dinner provided an opportunity for associates to poke fun at the firm's partners and policy. The evening itself is themed - one year it was 'Star Wars', this year it was a circus theme - and this is reflected in the pages of brochure, of which ALB has a copy.

But the Hong Kong based source, who is looking to move to a new firm in the city with her colleagues, told ALB: "I definitely have a sense of humour but you're making fun of people who have just lost their jobs.

"Everyone in the office is working out their severance packages and I want people to see the ignorant and flippant attitude in New York to the office and to Asia.

"They went over the line and everyone was disgusted by it," she added.

The parody, which was lampooned to the tune of 'Hello Dolly', accused the Hong Kong office of having a weak client base. It was retitled: 'The Dirge of Long Duck Dong' in apparent reference to the stereotypical Chinese exchange student in the movie 'Sixteen Candles'.

Chris DiAngelo, one of the firm's partners in New York, led the singing.

The decision to close the Hong Kong office came as a shock to those resident in it, not least because the office was starting to secure some significant mandates.

"We were just on the cusp of getting the practice up and running," said the Hong Kong based source.

For example, partner David Zhang recently acted as US counsel to Sinotrans on its IPO.

"We were doing good work," said the source. "And we had worked very hard to get on the approved list of Goldman Sachs, Merrill Lynch and the investment banking work."

"The firm has given, all along, really good indications that they were committed to Asia and to the Hong Kong office," said the source. "While they wanted to keep things small now, because of market uncertainty, they were happy to add more people as needed."

Dewey Ballantine first entered Hong Kong in 1994.