Attorney General, initially in elegant old US city (7)
I believe the answer is:
'us city' is the definition.
(I've seen this before)
'attorney general initially in elegant old' is the wordplay.
'initially' says to take the initial letters.
'in' is an insertion indicator.
'elegant' becomes 'chic' (I've seen this in another clue).
'old' becomes 'o' (common abbreviation eg in OE for Old English).
The first letters of 'attorney general' is 'ag'.
'ag' going within 'chico' is 'CHICAGO'.
(Other definitions for chicago that I've seen before include "American city; musical" , "Port on Lake Michigan" , "US city - musical featuring All That Jazz" , "Windy City of USA" , "Type of bridge" .)