Fallon is to launch Duffy Design, its highly regarded US design partner, in London.
The agency, which will be called Duffy Design London, will handle development work for Skoda, one of Fallon's clients. It will seek its own clients, as well as working with others in conjunction with Fallon.
The agency will be headed by Errol Flanagan and Adam Whitaker. Whitaker has won D&AD design awards for his work on Diesel, Olympus and Volkswagen.
He has worked with Richard Flintham, the joint creative director of Fallon, over the past few years.
Flanagan joins from his position as the head of planning at Attik. Before that, he worked at Michaelides & Bednash and Imagination.
Flintham said: 'I know I am not allowed to say the word 'integrated' without getting heckled, but it seems to me that if Duffy is sitting in the same office, it will become involved in the process earlier and, therefore, we will produce better work.'
Joe Duffy, the company's founder, added: 'There is a tremendous opportunity to apply the Duffy brand of strategic design in London. In the UK, advertising and design tend to operate in parallel universes. We intend to re-engineer this relationship for our clients.'
Duffy was founded in America in 1984 by Duffy and the US Fallon partners.
It has since built itself a formidable reputation, working with clients such as Coca-Cola, Kellogg and McDonald's.