German firms Boesebeck Barz & Partners and Droste are to merge to form Boesebeck and Droste Killius & Triebel.
It will be the fifth largest practice in Germany, with 75 partners and more than 150 lawyers. The new firm will have five national offices, as well as bases in Brussels, Warsaw, Zagreb and Alicante.
Frankfurt-based Boesebeck partner Eckart Wilcke said that Droste's strong intellectual property and competition law reputation would "complement our corporate and banking work".
Walter Klosterfelde, a Droste partner involved in the merger talks, said that the move seemed "natural, with benefits to both firms".
"To be a major player in Germany, you need to be strong in the traditional corporate and company work, which is mostly based in Frankfurt. You also need to have a strong presence in Berlin.
"We had been in Frankfurt, but we were not growing quickly enough, so a merger with Boesebeck - which is strong in corporate work in Frankfurt and Berlin - seemed obvious.
"We have an international tax stronghold in Munich which was attractive to Boesebeck. We are also a leading IP firm, with an office in Alicante - the seat of the European Trademark Office - as well as a long-established Brussels office which adds to its international presence."
Jan ter Haar, managing partner of Clifford Chance in Frankfurt, said this latest merger would not be the last in an active German market.
"It is part of a general tendency of German firms to group together. It is a fragmented country and the firms need a presence in all the major cities. "There is also an element of firms feeling that they have to reach critical mass in order to compete."
He said he did not think that the foreign presence in Germany was providing sufficient impetus for domestic firms to merge.
He said that although Boesebeck's link-up with Droste joined it to "an excellent Hamburg-based firm with a strong IT practice", it had done little to expand the firm's international presence.
"It will be interesting to see how German firms which are now going from regional to national practices will approach the international market," said ter Haar.
"Will there be more alliances with foreign firms or will foreign firms swallow up the German firms?"