Japanese corporate leader Nishimura & Partners is set to merge with Tokyo's Asahi Koma Law Offices, in a move that would form the country's biggest law firm.

The two firms have agreed the merger in principle, it was announced last week, but are yet to confirm a name for the combined firm or a date for the tie-up.

The 45-partner Nishimura said the move, which comes after a string of domestic mergers, was a response to the current push into Japanese law by a host of international firms.

The merger bid, which would create a firm with over 300 lawyers, is Nishimura's second in just over two years after the firm merged with bankruptcy specialist Tokiwa Sogo Law Offices in January 2004.

The 150-lawyer Asahi has offices in Tokyo, New York and Shanghai, as well as being a member of the Lex Mundi network, the Pacific Rim Advisory Council and The Interlex Group.

The talks underline the current level of interest in the Japanese legal market, which last year loosened restrictions on foreign lawyers offering local law.

The country, which despite being the world's second largest economy has a major shortage of commercial lawyers, has also seen a sharp upturn in M&A activity in the last two years.