In a move that could have ripple effects on American International Group Inc.’s myriad outside lawyers, the company has agreed to add two activist investors to its board of directors, including a top deputy of billionaire corporate raider Carl Icahn, who has been pushing for a split of the storied insurance giant.

Under an agreement announced Thursday, New York-based AIG will add two seats to its board of directors. The insurer nominated Icahn Capital LP managing director Samuel Merksamer and billionaire hedge fund manager John Paulson of Paulson & Co. to fill the new slots. For now at least, the deal staves off a potential proxy fight over Icahn’s proposal to break AIG into three smaller companies.

The AIG agreement comes on the heels of another Icahn-led corporate split. Xerox Corp., advised by Cravath, Swaine & Moore and Paul, Weiss, Rifkind, Wharton & Garrison, reached a deal in late January with the activist investor to divide into two separate companies. As reported by The Am Law Daily, the deal effectively reversed Xerox’s $6.4 billion acquisition in 2009 of Affiliated Computer Services Inc.

For Thursday’s Icahn agreement, Weil, Gotshal & Manges’ corporate department chair Michael Aiello and M&A partner Matthew Gilroy took the lead for AIG. The assignment continued Weil’s long-standing ties to the insurance and financial services behemoth. Among other matters, Weil previously had a lead role in AIG’s efforts to restructure and sell off assets to repay the more than $182 billion federal government bailout it received during the 2008 financial crisis.

On Icahn’s side, Icahn Enterprises LP general counsel Jesse Lynn and deputy general counsel Louis Pastor worked on the settlement. Icahn stressed in a statement that he will continue pushing for a leaner AIG, partly because streamlining the company could help it shed its designation as a systematically important financial institution, which subjects it to heightened scrutiny from federal regulators. (Gibson, Dunn & Crutcher is currently representing MetLife Inc., the largest U.S. life insurer, on its efforts to ditch the “too big to fail” label.)

Icahn also welcomed the addition to AIG’s board of Paulson, the hedge fund magnate who made a fortune betting on the 2008 financial cataclysm, saying that both activist investors “have stated the same goals for AIG.” Icahn added that both he and Paulson “continue to believe that smaller and simpler is better” for AIG.

Representatives for Paulson didn’t immediately return a request for comment Friday. Stuart Merzer, general counsel and chief compliance officer for Paulson & Co., advised on the AIG agreement.

AIG chairman Douglas Steenland, formerly a senior partner at one of DLA Piper’s predecessor firms, welcomed the company’s new board members, which will bring the total number of directors from 14 to 16.

“We look forward to benefiting from their insights as we move forward with our strategy to create a leaner, more profitable and focused AIG,” Steenland said in a statement Thursday. AIG also issued a separate statement documenting its fourth-quarter financial results, reporting a net loss of $1.8 billion.

While Icahn’s proposal is far from finalized, if it does come to pass, it could create flux within AIG’s in-house legal department—led by former Lehman Brothers Holdings Inc. general counsel Thomas Russo—and among its stable of go-to outside legal counsel. (Corporate Counsel, a sibling publication, reported last week on how Xerox’s legal department is spearheading the company’s effort to split in two.)

An AIG split has the potential to affect the bottom lines at many Am Law 100 firms. At one point in June 2009, for instance, Weil indicated in a court filing that an estimated 3 percent of its gross revenue over the prior year flowed from its work for AIG. In addition to Weil, Debevoise & Plimpton, Sidley Austin and Sullivan & Cromwell are among several notable firms that have handled litigation and transactional work for AIG in recent years.