SPECULATION is mounting that Scottish law firm HBJ Gateley is to merge with larger London-based firm Addleshaw Goddard.

HBJ Gateley declined to comment. However the company confirmed that is to end the relationship with its English counterpart Gateley plc in May next year.

In 2015, Gateley became the UK’s first commercial law firm to float on the alternative investment market. HBJ Gateley in Scotland remains a limited liability partnership as legal firms in Scotland are not able to obtain external investment.

In its most recent results, for the year to April 30 2015, HBJ Gateley made a profit of £9.3 million on turnover of £20m.

The firm has 45 partners in Scotland and 134 lawyers in total.

In a combined statement, the firms said: “Gateley Plc in England and HBJ Gateley in Scotland have announced today that their long standing business relationship will come to an end in May next year. Until then, both firms will continue to work together in the best interests of all clients.”

If a deal is concluded and HBJ Gateley’s Scottish offices in Glasgow, Edinburgh and Aberdeen are merged with Addleshaw Goddard, it would create a firm with revenues of around £220m.

Addleshaw Goddard reported turnover for the 2015/16 financial year of £202m and has previously stated an ambition to reach £250m in its 2017/18 financial year. The London-based firm also has offices in Leeds and Manchester as well as a presence in Asia and the Middle East.

Addleshaw Goddard made a play to enter the Scottish market earlier this year when it looked to merge with Maclay Murray & Spens, but negotiations broke down.

The firm could not be reached for comment.