Bingham McCutchen  is to acquire McKee Nelson , with the two firms to merge from the start of next month, writes The American Lawyer.

Partners at both firms were told of the merger this morning (6 July), with the combined firm, which will be called Bingham McCutchen, to take on all of McKee Nelson's lawyers.

The firms' joint revenue will likely top $900m (£554.6m), based on 2008 figures, and will include more than 1,100 lawyers. Bingham, with more than 1,000 lawyers spread among 12 offices, was one of the few major firms last year to show growth in both revenue (up 3% to $767m (£472.5m) and profits per equity partner (up 6%to $1.42m (£874,877). McKee Nelson had a tougher year: Revenue fell 16%, to $160m (£98.5m), and profits per equity partner dropped 15% to $1m (£616,000). In addition, layoffs and departures have whittled the firm down to 120 lawyers.

McKee Nelson, which is known as one of the pre-eminent firms for tax planning and tax litigation, was viewed by Bingham as an attractive addition.

Referring to the smaller firm's tax, financial institutions and capital markets-structured finance practices, Bingham chairman Jay Zimmerman said: "It's really rare to find a firm that is this size that has three market-leading practices. It will be part of our long-term strategy for serving the financial institution industry."

At its peak in 2006 McKee Nelson's structured finance group had more than 120 lawyers; today that number is about a quarter of that with roughly 30 attorneys. Twenty-three lawyers were laid off, 30 joined Ashurst in February, 26 departed under a voluntary program, and nine moved to other practice areas.

McKee's practice is concentrated in four areas: tax, business litigation, capital market and structured finance. It also has a strong white collar practice. The firm represents a roster of major financial institutions and companies, including General Electric Capital Corp, Deutsche Bank, Morgan Stanley, JPMorgan Chase and Credit Suisse. The two sides say they have not identified any significant conflicts.

Bingham and McKee Nelson discussed a merger late last year, but no deal emerged. Two lawyers familiar with the smaller firm say McKee Nelson also engaged in serious talks with Baker & McKenzie this year although the firm declined to confirm this.

McKee Nelson was founded in 1999 as the bold experiment of two prominent tax partners who left King & Spalding: William McKee and Nelson. The firm allied itself with Ernst & Young, and was called McKee Nelson Ernst & Young. The groundbreaking interdisciplinary foray didn't work out, and the two entities separated. The firm expanded into structured finance, becoming one of the leaders of the practice. It also meant the firm would be hit hard by the financial downturn and the bankruptcy of client Lehman Brothers. By June, the firm was down to 120 lawyers, from the roughly 200 it claimed as of 2006.