Hong Kong law firm Deacons Graham & James is to merge in Australia, creating the nation's seventh-largest practice with 500 legal staff. The merger with Australian firm Dunhill Madden Butler on August 1 will give Deacons access to a sizeable chunk of the legal market, with offices in Melbourne, Canberra and Brisbane. A separate tie-up with a mainland firm is also on the cards as Hong Kong legal practices race to bolster their presence there in anticipation of its entry into the World Trade Organisation. The mainland connection has also made SAR firms a target for tie-ups with international companies seeking a gateway to the highly regulated legal market across the border. Deacons itself is having on-going discussions with a number of United States and British firms for a potential marriage. Such an association also would arm the Hong Kong practice with a heightened global capability. It would also fill the gap left by Deacons' recent decision to sever links with its troubled United States associate Graham & James - ending a 10-year association. Deacons found itself at odds with Graham & James's merger plans in the US. The US firm has also been hit with high-profile partner defections and office closures during the past two years. From Saturday the Hong Kong firm - which has around 150 lawyers - will revert to its original name, Deacons. The tie-up is part of the firm's strategy to consolidate its Asia presence, Deacons managing partner Mark Roberts said. At the same time it would continue discussions with practices on both sides of the Atlantic. While such an association was 'not crucial for us,' Mr Roberts said, 'we will continue discussions'. By continuing to focus on Asia, the firm hopes its strategy will make it even more attractive to international firms. Deacons has a licence to operate in Guangzhou, but the 'WTO is going to result in a lot of work for law firms. We are going to have to have joint venture capability in the near future'. The mainland factor played a major role in the recent decision by London law firm Rowe & Maw to merge with Hong Kong's Koo and Partners.