Withers and Speechly Bircham have confirmed that they are in early stage talks over a possible combination that could create a UK top 25 law firm with revenues of around £170m.

The firms issued a joint statement today (25 March) confirming preliminary discussions are taking place, after RollonFriday first reported the pair were considering a combination last Friday (22 March).

Withers reported turnover of £113.3.m for 2011-12, with the equivalent figure at Speechly coming at £57.6m. A combination would therefore create a firm with joint revenues of a little over £170m, putting it just ahead of the 20th-placed firm in last year's UK top 50 rankings – Addleshaw Goddard – based on last year's numbers.

Withers has profits per equity partner (PEP) of £386,000, compared with £299,000 for Speechly. Both firms have a heavy focus on private client work.

A combined firm would have around 520 lawyers, including roughly 200 partners, based on Withers' 2011 calendar-year financial results and Speechly's figures for 2011-12.

In a statement, the firms said: "Withers and Speechly Bircham can confirm that they are in preliminary discussions regarding a potential merger. Both firms see exciting opportunities for growth in such a merger.

"Both Withers and Speechly Bircham have been growing their international offering in response to changes in the global legal market and the increasing importance of private capital in the world economy.

"There is still a lot more work to be done before any final decision can be reached and so we will not be issuing any further comment at this stage."

In addition to its London headquarters, Withers has bases in Geneva, Zurich, the British Virgin Islands, Hong Kong, as well as three US offices in New York, New Haven, and Greenwich, while Speechly has offices in London, Luxembourg and Zurich.

Speechly previously acquired West End outfit Campbell Hooper in 2009, while in 2002 Withers sealed a merger with New York private client firm Bergman Horowitz & Reynolds

One source close to the matter said: "Both firms have been concerned about the market share Mishcon de Reya has been winning, and this seems to be a move to consolidate in the hope of stopping this."

One partner at a rival firm said: "It's a smart move by Speechly, they'll be really pleased by the deal; it gives them ten more offices and exposure to a solid client base."

Many mid-tier firms are currently looking to consolidate in a crowded market, with news recently emerging that Addleshaw Goddard and Nabarro called off merger talks earlier this year.

Meanwhile, last November Field Fisher Waterhouse and Osborne Clarke called off talks over a tie-up, while earlier last year Field Fisher and Lawrence Graham confirmed that negotiations over a potential deal had ended.