DWF is set to acquire financially stricken Cobbetts in a pre-pack deal, Legal Week can reveal.

The deal, which is subject approval from the courts, will be pushed through after Cobbetts yesterday (30 January) filed a notice of intention to appoint administrators ahead of a fire sale of its business.

If the deal is approved, the process of transferring Cobbetts' staff to DWF will begin in the next seven days.

In a statement, DWF said that "poorer than expected trading in November and December last year caused Cobbetts to review its financial position and subsequently obtain an interim statutory moratorium to enable a sale of the business and its assets".

DWF managing partner Andrew Leaitherland (pictured) commented: "DWF's plans to grow, in a strategic, targeted way have been clearly set out and this move supports that goal. I am confident that the merging of the two firms would bring genuine benefits to both and, importantly, the joint client base. There are many synergies between the two firms in terms of the sectors in which we operate and this collaboration will further strengthen our existing business. I am very much looking forward to welcoming the new team to DWF."

"The legal industry as a whole has faced significant challenges. We will do all we can to make the integration as smooth as possible, however, as you'd expect in a move of this size, there are some areas of overlap and we may have to displace people or find them alternative roles. We will work hard to support all those involved."

The deal comes on the back of failed merger talks between the two firms last year. The proposed tie-up was called off last January with a joint statement from the firms citing "uncertainty in market conditions".

Cobbetts has been hard hit in the wake of the financial crisis, and has seen revenues fall almost 25% from a pre-recession high of £59.3m to £45.2m last year. The Manchester-based firm – which employs 492 staff and has 74 partners – confirmed this Wednesday (30 January) that it was aiming to sell off its business and assets as soon as possible.

Should it go ahead, the tie-up could see DWF's total headcount rise above 2,500, with the news coming shortly after the expansive firm secured a merger with professional indemnity law firm Fishburns and the hire of a 22-strong banking and finance team from Chafes Solicitors, with both deals set to go live tomorrow (1 February).

The agreement would mark another milestone in DWF's goal to reach the UK top 20 by 2015.

One Manchester partner at a rival firm said: "It's a shame, but there had been smoke coming out of the back of them for some time. The word in Manchester was that it had turned a corner, but there was obviously a deep-rooted financial problem that left it with little option."

Cobbetts, which ranked as high as 42nd in the UK top 50 in 2004-05, has suffered in the wake of the credit crunch, with three separate redundancy rounds during the downturn resulting in 69 jobs losses across the firm.

The firm had entered the top 50 after the Manchester stalwart embarked on an ambitious bid in the 2000s to refashion itself as a national player with mergers in Leeds and Birmingham. However, its expansion ultimately stretched it after the credit crisis in 2007 hit its core property practice.

One partner at a UK law firm said: "A pre-pack deal was expected but the challenge now will be holding the firm together in the weeks and months that follow. There will undoubtedly be a number of parties showing an interest in the talented individuals and teams at Cobbetts, while you have to question whether some will want to be part of DWF."

One Manchester-based partner said: "DWF needs to be very careful. There are all sorts of smaller boutique firms in the Manchester market that are winning a large amount of the work in their space, so taking on Cobbetts is not going to guarantee them increased work. Law firms are messy businesses to carve up; there are often so many creditors involved."