SJ Berwin is to seal its long-delayed merger with its German arm this year after reaching a compromise deal to financially integrate the allied multi-disciplinary partnership (MDP) with its UK base.

The move, which will fully integrate the UK firm with the 20-partner SJ Berwin Knoft Tulloch & Steineger from 1 May, follows months of negotiations between the firm and the English Law Society, which still bans MDPs in the UK.

In July last year the two firms drew up five different models for allowing the majority of German partners to join the City firm's partnership.

The merger plan was pushed through this year after SJ Berwin concluded that the Law Society's proposed MDP reforms were unlikely to be introduced for several years.

Integration of the MDP will see the majority of the German-qualified law partners joining as equity partners, with German tax lawyers joining as salaried employees.

The firm said that its tax lawyers would have "the moral standing of partners".

The integration brings to an end five years of a close alliance between the UK and its German practice, which has previously existed as a separate profit centre. However, the integrated firm will maintain the Knoft Tulloch & Steineger brand in Germany.

Uwe Steineger, an SJ Berwin Munich-based partner, told Legal Week: "We will fully integrate the firms on 1 May, but it will not change us as we work on the assumption that we have already merged."

Steineger added that the deal still faced final agreements on tax matters from a number of tax authorities.

Many UK firms have faced similar MDP problems when pushing German firms towards merger.

Using a different model, Linklaters separated the tax adviser and accountancy division of its German merger partner Oppenhoff & Raedler into a separate entity to conform with Law Society rules.