Telecoms specialist Rakisons and US firm Steptoe & Johnson will merge on 31 December.
The two firms had been locked in talks for several months. The UK practice will be known as Steptoe Johnson Rakisons for the first year, after which Rakisons will be dropped from the name. The US firm will not change its moniker.
Steptoes chairman Lon Bouknight, who will be chairman of the merged firm, confirms that there will be full profit-sharing. Rakisons senior partner Tony Wollenberg, who declined to comment, will be London managing partner.
Washington-based Steptoes has offices across the US. This is its first foray into London and Europe. The firm had a turnover of $119m (£83.7m) and profits per partner of $435,000 (£306,000) last year. It is understood that while 16-partner Rakisons has similar partner profits, its turnover is considerably less.