Specialist insurance firm Kennedys is in talks with North West firm, Weightmans, and North East firm, Jacksons, to create a new national law firm.
If the merger gets the go-ahead, then the new firm will be in the top 25 nationally by size with 319 fee-earners.
The news comes just weeks after The Lawyer revealed that Beachcroft Stanleys, Wansbroughs Willey Hargrave and Vaudreys were involved in talks to create an even larger firm.
The driving force behind these mergers is the wave of consolidation among insurance companies.
The recent announcement of the proposed £15bn merger of Commercial Union and General Accident followed the creation of the Royal & Sun Alliance in 1996.
The creation of such insurance giants is fuelling demand for insurance law firms to provide a consistent and cost-effective service to clients across the country.
The big insurance companies are also looking for their solicitors to invest heavily in IT and case management systems to deliver those cost-savings. Larger firms with greater resources are better placed to meet this need.
Weightmans senior partner Anthony Summers said: "In our view, in a not very long time there will be half a dozen giant insurance companies in the UK serviced by between 10 to 15 law firms."