A process for making a compound of the formula ##STR1## which process comprises contacting, in the absence of an acid acceptor, an acyl halide with an aniline substituted gamma-butyrolactone in the presence of a non-basic solvent and at a temperature between 65.degree. and 150.degree. C. Thus, 3-(N-chloroacetyl-N-2,6-dimethylphenylamino)-gamma-butyrolactone is prepared by a process comprising contacting, in the absence of an added acid acceptor, chloroacetylchloride with 3-(N-2,6-dimethylphenylamino)-gamma-butyrolactone in the presence of a non-basic organic solvent and at a temperature between 65.degree. and 150.degree. C. Preferably, the 3-(N-2,6-dimethylphenylamino)-gamma-butyrolactone is formed by reacting alpha-bromo-gamma-butyrolactone with dimethylaniline in the presence of water and in a non-basic organic solvent, and the 3-(N-2,6-dimethylphenylamino)-gamma-butyrolactone in the organic solvent is phase separated and fed straight through to the acetylation step.