Linklaters' Asia managing partner has said he is open to the possibility of a merger with Australian ally Allens Arthur Robinson, as the firm takes steps to expand collaborative working with its antipodean counterpart.

The magic circle outfit, which sealed its alliance with Allens – one of Australia's 'big six' firms – in April 2012, could look at the possibility of financial integration in the future as a way of providing a one-stop shop to its clients, according to Marc Harvey.

The two firms currently second lawyers between Australia and London, but are looking at expanding the programme to include secondments between Australia and New York.

Harvey insisted there were currently no talks between the firms about moving forward to a financial merger, but said that this would be a positive step in the coming years.

He told Legal Week: "We are really pleased with how the alliance is going. An option in the future would be some kind of financial tie up. It's not something we are actively discussing at the moment but it would be a great thing to achieve.

"But in order for that to happen both firms have to be operating at similar levels. If we could get that, it would be fabulous. Our ultimate goal need not and never was complete merger… But it could be quite beneficial."

Asked about the possibility of a merger, an Allens lawyer agreed there could be benefits for both sides, but said there would have to be a full review of how the Australian firm currently pays its partners.

"If something like that was to work the key issue we would need to deal with is that an Australian partner is making less than one in England," said the partner. "[That] would put a lot of pressure on the relationship.

"But Linklaters has methods to resolve this in other jurisdictions, and in some ways a merger could benefit us as it might [give us] the capacity to recognise efforts of star partners more than we do.

"At the moment we cap out at a low level because more than half of the partnership is on a higher pay run… and we only have the capacity to pay 20% more than the highest unit earner."

As it stands, Linklaters has a strict lockstep model for partner pay and Allens has a modified lockstep.

The Allens partner added that a merger could also save both firms money on back office functions such as insurance and IT systems.

Linklaters is one of several British players to enter the Australian market through a combination with a local firm. Ashurst, Clifford Chance, Herbert Smith and Bird & Bird have also all moved into the jurisdiction in recent years.

Linklaters' decision to form a global alliance with Allens was seen as a more cautious approach to market entry compared with the full mergers of Herbert Smith and Freehills, and Ashurst and Blake Dawson. However, the magic circle firm's deal does allow for joint working on deals as well as referrals, secondments and sharing of know-how.

Alongside the alliance, the two firms already have an element of financial integration through joint venture arrangements in their energy and infrastructure practices, as well as a three-way tie up in Jakarta, Indonesia with local outfit Widyawan & Partners.

Since the tie up, Allens has also wound down its offices in Beijing, Shanghai and Singapore and seen the number of lawyers in Asia dwindle, with some relocating to Linklaters' bases and others either leaving the firm or returning to Australia. The firm's Hong Kong office is also set to close, though no timeframe has been given.