Pinsent Masons and Salans were considering carrying out a merger, but ruled it out in the short term because of the financial cost, The Lawyer understands.
However, the two firms signed an agreement last month that will see them prepare joint pitches and refer work to each other on a global basis.
A source close to the deal said that in the current economic climate the alliance arrangement was seen as a “low-cost, affordable way” of pursuing the same strategic growth objectives.
Although Pinsents has yet to submit complete financial results for the 2008-09 financial period, data from 2007-08 reveals that the two firms are very closely aligned entities.
Pinsents brought in a revenue of £213m, had an average profit per equity partner (PEP) of £500,000 and 40 per cent of total partners were part of the equity.
Salans, which turned over £143m during 2007-08, had a PEP of £502,000, with 39 per cent of the firm’s partners in the equity.