Washington firm Patton Boggs' is set to turn its back on a merger offer by Dentons as a rival deal from Squire Sanders is understood to be close to completion.

A source involved in the discussions told Legal Week that Dentons' offer of a merger with Patton Boggs – described by the former firm's chief executive Elliott Portnoy in April as a "serious overture" – had yielded no further developments or discussions.

Patton Boggs is instead understood to be on the cusp of sealing its proposed merger with Squire Sanders, a move that would create a 1700-lawyer firm in 45 offices across 22 countries, with combined revenues of more than $1bn (£600m).

Both Dentons and Squire Sanders declined to comment. For Patton Boggs, neither managing partner Edward Newberry nor a spokesperson responded to requests for comment.

Last week, Patton Boggs agreed to pay Chevron $15m (£8.8m) to settle a fraudulent misconduct claim, easing fears over a potentially damaging liability threat for the firm.

Chevron – which alleged lawyers at Patton Boggs committed fraud during a long-running dispute over the company's legacy drilling activities in Ecuador – agreed to drop all claims against the firm. Patton Boggs expressed "regret" for its involvement in the case, but did not admit liability.

The last year has been a turbulent time for Patton Boggs on other fronts, with revenue falling 12% in 2013, and a string of departures reducing lawyer numbers to less than 340. According to the American Lawyer, attorney headcount stood at 485 at the end of 2012.

"Many Patton Boggs partners with significant practices are making exit plans if the Squire Sanders deal goes through," added the source, who said a number of Patton Boggs partners "do not believe that a deal with Squire Sanders is compelling."

Discussions between the two firms were first announced in February, described at that stage by both firms as being "in the early stages".

In November, merger discussions between Dentons and another Washington firm, McKenna Long & Aldridge, collapsed after partners at McKenna voted against the tie-up.

Dentons management has made no secret of its intentions to seek out further merger opportunities, earlier this month telling a Washington DC-based publication it is interested in "dozens of law firms" in the US, and that it was in private talks with a number of outfits.

Separately, Squire Sanders this week completed its seventh partner hire in London since the start of the calendar year, with the appointment of DLA Piper's former real estate head Gary Paddison.

The move reunites Paddison with former DLA colleagues Rachel Orton and Martin Rees, who moved over to Squire Sanders earlier this year.

Others to have also made the move to Squire Sanders in recent weeks include former Wragge & Co real estate litigation partner Alison Hardy, Addleshaw Goddard's head of data protection Mark Gleeson, former Berwin Leighton Paisner (BLP) employment head Fraser Younson and China corporate partner Michelle Chen, also of BLP.