KLegal and McGrigors in secret negotiations

KPMG's law firm KLegal is in merger talks with Scottish giant McGrigor Donald.
The talks are aimed at ramping up KLegal's London operation, as well as bolting on one of the largest firms north of the border.
A combination would form a firm with a £50m turnover, propelling the accountancy-tied firm into the UK's top 40. In London it would exceed 30 partners, which would effectively double KLegal's presence in the capital.
It would also make KLegal the first of the accountancy-tied firms to secure a merger to boost its London office. It would jump to more than 70 partners, rivalling 101-partner Andersen Legal and pulling away from the smaller Landwell and Tite & Lewis, at 16 and 14 partners respectively.
KLegal managing partner Nick Holt declined to comment, while a spokesperson for McGrigor refused to confirm or deny the talks.
Discussions are at an early stage, although one source said that both firms were hoping to secure a deal by the beginning of next year.
McGrigor is understood to have held talks with a number of English firms as it strives to bulk up its London presence. The office, home to a quarter of McGrigor's partners, doubled its fee income last year.
Recent lateral hires include DJ Freeman's former construction head Anthony Edwards and Berwin Leighton (now Berwin Leighton Paisner) corporate partner David Mandell.
The firm's banking practice fits with KLegal's technology focus and will be a particular attraction. McGrigor advised both the Halifax building society and the Royal Bank of Scotland on the launch of their respective internet banking facilities, then won a pitch for the same work from the Bank of Scotland.
The list of corporate clients boasted by McGrigor includes Boots, BP, BT, Hilton Group, McDonald's Restaurants, the Ministry of Defence Procurement Agency, Scottish Power and the Post Office.
The firm also has a strategic alliance with US firm Pepper Hamilton, which is based in Philadelphia.
KLegal only launched in London just over two years ago, but already boasts 100 lawyers and a turnover of £16.5m.