Field Fisher Waterhouse and LG have called off merger talks that could have created a firm just outside the UK top 20 with combined revenues of £150m.

The talks, which started in October last year and were confirmed in May, ended earlier this month before anything was formally taken to partners.

The deal had been expected to go to a partner vote later this summer and would have seen Field Fisher move out of its Vine Street office into LG's premises at More London Riverside.

Both firms are still understood to be keen to secure a UK merger, despite the end of the discussions.

Field Fisher managing partner Matthew Lohn (pictured) said: "In May we confirmed that Field Fisher Waterhouse had been in talks with Lawrence Graham, exploring the benefits that a merger would bring. We can confirm these talks have now concluded.

"Merger is still an option for Field Fisher Waterhouse – we have ambitious growth plans and merger is one way to achieve those goals. Whilst there were some good synergies between the two firms we never reached the stage of putting it to partners and are not taking the process forward."

LG's managing partner Hugh Maule commented: "In evaluating a merger between our two firms, we have concluded that we will be unable to reach agreement and have therefore ended discussions.

"The fundamentals of a merger were we believe sound, and although we are disappointed in the outcome of what were extremely valuable and interesting discussions, we remain respectful of each other and on very good terms. We will continue to focus on our strongest service areas with investment in organic growth and international expansion in line with our strategy."

Confirmation of the end of the merger talks comes after Field Fisher, which appointed Grant Thornton to carry out due diligence on LG, announced a 20% drop in profits per equity partner (PEP) for 2011-12, alongside a 4% increase in revenues.

PEP fell from £510,000 in 2010-11 to £410,000 for the most recent financial year, while revenues rose 4% from last year's figure of £94m to £97.5m.

LG is yet to announce its 2011-12 financial results; however, it posted PEP of £412,000 for the 2010-11 financial year against turnover of £59m.