The tie-up between Hill Taylor Dickinson with Hill Dickinson should more accurately be described as a reacquaintance.

The two firms went their separate ways back in 1989. Now the 20-partner London boutique Hill Taylor is being reabsorbed into Liverpool-based Hill Dickinson to form a 140-partner firm with a turnover of £65m.

The move comes hard on the heels of Manchester stalwart Halliwells' takeover of James Chapman & Co's highly-rated insurance practice – a deal that many regarded as heralding a wave of consolidation among insurance firms.

There are certainly similarities in the two deals, in that James Chapman and Hill Taylor were both being squeezed by larger rivals. They were, however, fishing in distinctly different ponds. Indeed, James Chapman's practice mix was more akin to that of Hill Dickinson, which has been busy building a national insurance-focused practice since its split with Hill Taylor.

Hill Taylor's horizons, on the other hand, have been distinctly more international as it attempted to build a shipping-focused practice in the mould of larger firms such as Richards Butler.

The two branches' different experiences since their separation suggest that it is the Liverpool one that has fared the best. The latest results season saw it secure double-digit increases in turnover and average profits per partner, which stand at a highly respectable £296k.

Crucially, it has diversified successfully out of insurance law. So while it still has a strong general insurance practice – it is on the Royal & Sun Alliance and Mitsui Sumitomo Insurance's general panels – it also has significant corporate and property teams.

Contrast this with the less positive experience of Hill Taylor, which, despite its strong reputation for maritime law, has in recent years lost a succession of partners to larger rivals including Lawrence Graham, Barlow Lyde & Gilbert and Richards Butler. Then, in November 2005, Holman Fenwick & Willan bagged its three-partner Dubai office. Partners at both firms say that the rationale behind the deal was the need to provide a greater range of services to marine and insurance clients.

Now the two firms are re-merging, Hill Taylor's clients will certainly find themselves being offered a greater range of services – and at more competitive rates to boot, given the potential for the larger firm to deploy economies of scale as well as farming low-value work out to its regional offices.

Meanwhile, Hill Taylor gets to significantly improve its marine law offering while giving its London office greater critical mass.

All in all then, a deal that makes good sense all round. As for the bigger picture – after a period when it seemed that the margins for defendant insurance work were so low it was hardly worth the candle a group of national insurance-focused firms do seem to be emerging that have struck upon on a way of making it pay. Beachcroft is one. Hill Dickinson is also firmly in this camp.