Gadens Lawyers in Sydney and MacGillivrays Solicitors in Brisbane announced yesterday that they plan to merge. The deal will create a leading force in the business of originating and processing legal documents for mortgage funders in Australia.The merged firm, which will trade under the Gadens' banner, will manage settlements in excess of A$3 billion a month, equal to about six per cent of the national mortgage market by volume.Gadens will vie with First Mortgage Services as the lead supplier in the market. The latter acquired the mortgage servicing business of Perpetual last year and has a staff of around 300.Jon Denovan, a partner in Gadens' Sydney office, said that "when it comes to all types of finance documentation and recovery, we are, I think without doubt, the largest operation in Australia.   "We do lots of SMSF lending, commercial lending, corporate and institutional lending, regulatory and compliance advice, and huge amounts of recovery work."Gadens is already on the national legal panels for major banks, while MacGillivrays is not.Other leading law firms in this sector are Galilee Solicitors and Mortgage Settlements Australia.Craig Green, managing partner of MacGillivrays, said the two firms "had been friendly competitors for 20 years. There will be economies of scale for us."Whether lenders can look forward to a fall in costs - which are often levied under a fixed fee arrangement - is not clear, with margins on mortgage processing already being regarded as fine from the point of view of the law firms that provide these services.