Four in five law firms expect to join forces with other professionals under the reforms to be introduced by the Legal Services Act, a new survey has found.

At the same time, one in four law firms plan to seek external capital in the next two to five years and more than one third will consider a public listing, according to the survey of 100 UK firms.

The survey by Smith & Williamson, the accountancy and investment group, shows that increasing numbers of law firms are making plans to take advantage of the "big bang" of the Legal Services Act.

In 2007, 77 per cent of law firms anticipated joining forces with other professionals and in 2006, 78 per cent. That figure has now risen to 82 per cent.

As for reforms that will allow law firms to raise external capital, more than one in four, or 28 per cent, expect to take advantage and seek external finance within the next two to five years.

Similarly, the proportion of respondents who thought it "unlikely" that they would raise external capital has fallen since 2007, from 74 per cent to 63 per cent.

Of those who anticipate raising external finance, more than a third or 38 per cent would consider a public listing and more than half, 52 per cent, would look at private equity or venture capital.

Giles Murphy, head of assurance and business services at Smith & Williamson, said: "Our findings suggest that a core element of the top 100 law firms is actively pursuing the option of external equity funding.

"While we expected there would be initial interest in the opportunities that the Act created, including the potential to list on the Stock Exchange, this has remained strong over the past 12 months, despite the worsening economic conditions and the decline in equity values."

He said that it seemed clear that law firms would be combining with other professionals, "transforming forever the nature of the legal profession".

The Legal Services Act 2007 will start to come into force from 2008 when the first aspects take effect and non-lawyers wil be able to become partners in solicitors' practices.

Mr Murphy added: "We anticipate that it will be increasingly common that financial directors or similar wil become equity partners and it will remove one of the potential barriers for non-lawyers to take on managing partner roles."

The survey also looked at how much capital firms might wish to raise. Of those thinking of doing so, ten per cent would be looking to secure up to £50 million, whereas only five per cent were seeking to raise this much last year.

About 34 per cent thought they would raise up to £5 million; 24 per cent up to £20 million; ten per cent up to £50 million and 31 per cent did not know.

The most common reason was to finance long-term development; followed by recruitment or acquisition of teams and by "the opportunity to develop new sectors".

Mr Murphy said: "It was once thought that the Act would simply provide a route for partners to sell out, but our survey confirms this is reducing in importance for firms, quite possibly as potential investors emphasise their lack of interest in such a model."

The survey findings were based on interviews with 102 law firms during September this year as part of Smith & Williamson's annual survey into the professions.

A total of 28 participating law firkms had 100 plus partners; 31 had 50-99 partners; 25 had 26-49 partners; 14 had 11-25 and four had 1-10 partners.

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