A bi-coastal U.S. law firm merger that would have created a 1,200-lawyer national firm with annual revenue of $1 billion has been called off, the firms say.

Dewey Ballantine of New York and San Francisco`s Orrick Herrington & Sutcliffe called off the merger less than three months after the firms` executive committees backed the combination, The American Lawyer reported.

Since the initial agreement, a number of 'significant challenges' arose, the firms said. Adding to the strain, more than 10 Dewey partners left, though not all departures were merger-related, the American Lawyer said.

A former partner attributed the breakdown of the merger to a leak early in the discussions between the two firms.

The combined firm, whose name would have been Dewey Orrick, would have ranked among the 10 largest law firms in the United States.