Preston Gates & Ellis, the Seattle firm established by the father of Microsoft founder Bill Gates, has pulled the plug on merger talks with Luce Forward Hamilton & Scripps.

The two firms have been in talks since late last year, but went public with their intentions this January. The tie-up would have created a serious rival to the larger West Coast practices, with 600 lawyers and a combined turnover of $242.5m (£154.7m).

The merger would have filled a gap in Preston Gates’ geographical spread, as the six-office Luce Forward has a base in Los Angeles.

Preston Gates closed its Los Angeles office last September as six of its seven lawyers there relocated to Piper Rudnick due to a slowdown in business. The office mainly advised Microsoft, one of the firm’s largest clients, and Southwest Airlines.

The reason for calling off the talks is not clear, although Luce Forward said the decision was mutual and was down to a lack of “potential synergies”.