Although many leading accountancy firms have set up internal legal practices with a view to countering the declining profitability of their core audit markets, this deal would be a big challenge.
Wilde Sapte is a long-established City firm with about 80 partners and more than 200 other fee earners spread between the UK and international locations including Brussels, Paris, Hong Kong and New York.
Andersen, which last year gained about pounds 15m of revenues from Garretts and Dundas & Wilson, its UK legal operations, has long been keen to put such activities on a par with those that it has in other parts of the world, notably France.
According to today's issue of The Lawyer magazine, there has been mounting speculation in the City about such a merger, with one top firm already understood to be devising a strategy for countering the threat. It claims that Wilde Sapte has been in discussions with Andersen since the accountancy firm's talks with another City firm, Simmons & Simmons, broke down late last year.
The firm is said to have been in talks with several leading accountancy firms, although merger talks between four of the biggest firms - KPMG, Ernst & Young, Price Waterhouse and Coopers & Lybrand - have created uncertainty in the field.
Steven Blakeley, Wilde Sapte's managing partner, fuelled speculation about such a link-up last year, when he said that combining with a big accountancy firm could provide his organisation with the international name and resources it required. Neither firm would comment on the report last night.
The report comes as the dispute between Andersen and the Andersen Worldwide organisation appeared to deepen. Andersen Consulting, which intensified the long-simmering row by shortly before Christmas calling for an arbitrator to intervene, late last week applied to a US court for an injunction preventing the accounting arm from continuing with actions that it claims will derail the arbitration process. The court in New York is due to reconvene in two weeks.
The two sides are divided over the payments the more profitable Andersen Consulting makes to the audit firm of which it was a part until 1989 and other issues concerning the structure of their relationship. But there is speculation that they will agree to an out-of-court settlement.
Some observers are even suggesting that a formal split between the two Andersen units could lead to Andersen Consulting linking up with another consulting firm. However, Nick Land, UK senior partner of Ernst & Young, which last week dramatically called off its planned merger with KPMG, said it was unlikely that his organisation would be a suitor.
Meanwhile, Coopers & Lybrand and Price Waterhouse, which sparked the current round of merger mania by announcing last September their plans to create a worldwide firm with about $12bn (pounds 7.3bn) in revenues, insisted that their deal was still on track.
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