Hammonds has moved a step closer to a merger in Italy, as local ally Rossotto prepares to bolster its ranks with two team hires, including one from Allen & Overy (A&O).

The 75-lawyer Italian firm is set to bring in 20 lawyers by September, including two partners and a team of associates from A&O.

Senior A&O Milan corporate partner Mario Colombatto and banking partner Giovanni  Luppi will both join Rossotto as partners, with the Italian firm to be renamed as R&P Legal. Colombatto will serve as managing partner with Riccardo Rossotto to remain senior partner.

In addition, a separate tax team including two partners is joining from Italian independent Macchi di Cellere Gangemi.

The hires will significantly strengthen Rossotto, which had a turnover of E14m (£12m) during the last calendar year and currently has 12 equity partners.

R&P Legal, which has five offices, will continue to work with Hammonds, with both firms revealing that they intend to merge.

Hammonds and Rossotto initially formed an alliance in 2001, with the agreement extended in 2007 for a further five years. Italy is currently the only one of Hammonds' six European bases which does not share a profit pool with the UK firm.

Hammonds managing partner Peter Crossley commented: "It remains our ultimate goal to achieve a merger and this is another step on the journey. Rossotto is hiring a very able team. This will bring them the strength in corporate, banking and financial services that they and our clients need."

Rossotto added: "I strongly believe that Colombatto's strength in banking and finance will strengthen
Hammonds globally.

"We would like to develop our practice with Hammonds but we need to improve our cross-border capacity as well as address our organisation and profitability [before we can merge]."