Arnold & Porter and Kaye Scholer have agreed a merger deal, which will create a 1,000-lawyer firm with combined revenues of around $1bn, under the new name of Arnold & Porter Kaye Scholer.

The two firms have been talking on and off for about a year, according to Legal Week sister title law.com, with the combination now set to go live on 1 January next year.

The combined firm will have approximately 1,000 lawyers across nine US and four international offices. Kaye Scholer, which has around 370 lawyers, is roughly half the size of 665-lawyer Arnold & Porter.

Both firms have small outposts in London – Arnold & Porter is the larger of the two with 19 partners, while Kaye Scholer has 10 partners in the City, according to their respective websites. Arnold & Porter has a base in Brussels, while Kaye Scholer has offices in Frankfurt and Shanghai.

Both firms emerged from 2015 in weakened financial positions compared with previous years. Kaye Scholer reported a 1.3% drop in gross revenue to $370m. Profits per partner dipped 2.1% to $1.38m. Revenue per lawyer declined 2% to $1m.

Arnold & Porter, a traditional Washington DC litigation and regulatory powerhouse, declined in both revenue and profits per partner last year. Gross revenue fell by 6.4% to $650m, while profits per partner fell 12.6% to $1.21m. Earlier this year, the firm took on veteran King & Wood Mallesons litigator Hilton Mervis as a partner in London.

The combined revenue figure of around $1bn is set to see the firm join the top 40 largest firms in the world – in 2015, 35 global law firms posted revenues of more than $1bn.

Richard Alexander, the current chair of Arnold & Porter, will also serve as chair of the combined firm.

Alexander said: "The combination will allow us to stay true to the shared values of both firms. We will be one of the world's leading pro bono law firms, continue to maintain a collegial work environment, and foster a consensus-based culture with an unyielding commitment to diversity and inclusiveness."

As The American Lawyer reported in mid-October, the law firm merger front was quiet in the third quarter of 2016, but a spate of combinations announced in the last month suggest that the end of the year is likely to bring the usual upturn in merger news.