Top accountancy firm PricewaterhouseCoopers is merging with Australian law firm Dunhill Madden Butler, to create a new legal division.
PricewaterhouseCoopers Legal will be based in Sydney and will specialise in IT, telecommunications and e-business law.
The merger comes two months after the departure of 27 of Dunhill Madden's Sydney partners and 125 of its lawyers to the legal branch of PwC.
Dunhills was left with 40 partners based in offices in Melbourne, Brisbane and Canberra.
Last month the managing partner of Dunhill Madden's Melbourne office, charged with rebuilding the troubled firm, left to head the Australian operation of Baker & McKenzie. David Nathan said he wanted a new challenge after 16 years at Dunhill Madden, and he had begun negotiations with Baker & McKenzie before the September defections.
PwC national managing partner Paul Koenig says: "Internationally we have close to 2,000 lawyers in 44 countries.
"Our plans for growth are aggressive and rapid - by 2004 we expect the Australian operation will grow by 250 per cent."
PricewaterhouseCoopers Legal is expected to invest approximately AU$3m (£1.23m) in its business within three years, and plans to recruit between 600 and 800 professionals.
Carmen McElwain, formerly of the Australian Government Solicitors Office, joins the team with a core group of taxation specialist colleagues.
PwC chairman John Churchill says: "PricewaterhouseCoopers Legal will draw on top legal practitioners and other leading professionals to deliver whole business solutions and advise on strategic issues including corporate governance and risk management."