Aug. 27 (Bloomberg) -- Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, both based in New York, agreed to merge and create a 1,300-lawyer firm with revenue of more than $900 million.

The merger needs the approval of partners at both firms. The new Dewey & LeBoeuf will be led by current LeBoeuf Chairman Steven H. Davis, with equal representation of both firms on its executive committee, they said today in a joint statement.

Dewey Ballantine, which represented MedImmune Inc. in a $14.7 billion acquisition by AstraZeneca Plc announced in April, is known for its mergers-and-acquisitions practice. LeBoeuf specializes in litigation and working for the energy and insurance industries.

``They're an excellent match,'' said Bruce MacEwen, a New York-based legal consultant. ``They are both historically New York-centric firms with similar financials.''

``Dewey Ballantine has been focused on growth for some time,'' Chairman Morton Pierce said in the statement. ``We believe this combination is to the advantage of everyone at the firm and our clients.''

There are few conflicts between clients of the two firms, a person familiar with the talks said, making the merger more likely to occur.

LeBoeuf last year had revenue of $513.5 million and average profit per partner of $1.42 million, according to the American Lawyer, a trade magazine. Dewey had revenue of $408.5 million and per-partner profit of $1.45 million.

11th-Largest Firm

Combined, the firm would be the 11th largest in the U.S., according to the National Law Journal, a legal newspaper. The largest U.S. firm is 3,535-lawyer Baker & McKenzie. LeBoef will have 550 attorneys in New York, the joint statement said.

LeBoeuf has offices in the U.S., U.K., France, Belgium, Russia, China, South Africa and Saudi Arabia. Dewey has offices in the U.S., U.K., China, Italy, Germany and Poland. Combined, they would have offices in 25 cities.

MacEwen, the consultant, said Dewey & LeBoeuf will need an enlarged presence in China to compete with the top U.S. firms.

``They both have completely insignificant outposts in Beijing,'' MacEwen said. ``They have to be willing to make a long-term investment and lose money for a while.''

LeBoeuf has hired several prominent partners this year, including Alan Salpeter, a former Mayer, Brown, Rowe & Maw litigation partner, and Michael Steele, a former Maryland lieutenant governor.

LeBoeuf Growth

In June, LeBoeuf acquired Londell McMillan's boutique firm, which has represented the musicians Michael Jackson, Prince and Kanye West; film director Spike Lee; and rap producer Russell Simmons.

LeBoeuf's clients include Telefonica SA, Arab Bank PLC, the government of Ghana and Zurich Financial Services AG. Dewey's clients include HCA Inc., Capmark Financial Group Inc., Eli Lilly & Co. and Mariella Burani SpA.

Dewey and San Francisco-based Orrick, Herrington & Sutcliffe called off a merger in January that would have created a 1,500- attorney law firm. The leadership of both firms recommended the combination to their partners in October. A partner vote never took place.

At least 14 partners left Dewey while talks with Orrick were taking place. Since then, Dewey has hired more than 25 partners.

``For Dewey, it was their first encounter with the forces of globalization and they definitely came away with a bloody nose,'' MacEwen said.

Pension Liability

One of the sticking points in Dewey's merger discussions with Orrick involved pension liability, MacEwen said. Orrick has no unfunded pension liability, while Dewey's is substantial, he said. The situation got worse as Dewey began losing partners, according to MacEwen.

``If partners with vested benefits decamp,'' he said, ``the firm still owes the benefits but has lost some of the revenues that they were counting on to meet those obligations.''

If the proposed merger falls through, the impact on Dewey would be worse than that on LeBoeuf, MacEwen said.

``Dewey will be perceived rightly or wrongly as having tried twice to do something to fundamentally alter their market position without success,'' MacEwen said. ``And what people will read into that is that Dewey does not think its current market position is optimal.''

To contact the reporter on this story: Lindsay Fortado in New York at lfortado@bloomberg.net.

Last Updated: August 27, 2007 09:46 EDT