Benelux giant Loeff Claeys Verbeke and leading Paris firm Gide Loyrette Nouel are seeking to link with top German firm Bruckhaus Westrick Heller Lober, in a move that threatens their alliance with Allen & Overy.
Although Sietze Hepkema, a partner at Loeff Claeys, confirmed that talks had taken place between Gide, Bruckhaus and itself, A&O senior partner Bill Tudor-John said his firm was not interested in a link with Bruckhaus and was not involved in the discussions.
The Lawyer understands that A&O is more interested in an alliance or merger with Hengeler Mueller Weitzel Wirtz, a rival to Bruckhaus, another of the "big four" Frankfurt firms and a leading capital markets practice. Hepkema would not give any details, but said: "We are reluctant to publicly comment, given the stage that they are in."
However, it is understood that the firms are examining an arrangement beyond affiliation and are keen on a UK link. Sepkema said that he hoped that A&O would join the talks.
Friction in A&O's alliance with Gide and Loeff, which started in the early 1990s, first surfaced last year when A&O insisted on changing the agreement with Gide to allow it to appoint French banking partner Luc Rentmeesters.
But Tudor-John said there was no cause for concern, describing the alliance as "solid".
He insisted: "We are happy with the arrangements," He added: "If [Gide and Loeff] want to tie up with firms from elsewhere, that's for them to do."
Sepkema would not comment on whether the Allen & Overy connection could be maintained if a deal was struck with Bruckhaus.
Tudor-John said that the Frankfurt office, which has 22 lawyers, will continue to grow organically. Partner Stephen Denyer has been transferred there from Warsaw to supervise its growth he is planning to double the number of lawyers in the office within a year.
But, with Linklaters and Freshfields doing deals with leading German firms and Clifford Chance indicating that it too would consider a merger in Germany, the pressure is on the firm to look at more radical ways of building up German law capability or risk being left far behind its rivals.