Clifford Chance, the world's biggest law firm by revenue, today threw down a challenge to rivals eyeing the coveted Indian legal market after announcing a tie-up with AZB, one of the country's top law firms.

Under the "best friends" alliance — reminiscent of Slaughter and May's informal ties with several of Europe's leading law firms — AZB will become Clifford Chance's first choice for referring clients requiring specialist legal advice in India.

In return, AZB will gain access to Clifford Chance's network of 30 offices worldwide.

India, with its emerging conglomerates and fast-growing economy, is seen as one of the most promising areas of expansion for international law firms and a potentially multibillion-pound legal market.

But although Clifford Chance has 195 lawyers in 16 offices advising clients on Indian legal issues, it and other foreign law firms are barred by Indian regulations from formally operating in the country.

Stuart Popham, senior partner at Clifford Chance, said: "It is an increasing challenge for both Indian and international clients seeking cross-border advice that they still have to look outside the country to access the requisite experience, resources and expertise.

"This arrangement will allow our two firms to offer the best possible service within the current regulatory restrictions."

The informal alliance will lay the groundwork for a formal partnership or even a merger if the prohibition on foreign law firms is eventually lifted.

"It is the aim of both firms to move towards a closer association when the regulations permit," Clifford Chance said in a statement.

The tie-up is testament to AZB, which has offices in Mumbai, New Delhi, Bangalore and Pune and acts for clients such as the Tata Group and Microsoft.

The legal services market in India has developed significantly in recent years, with the emergence of a handful of dominant law firms. Top corporate lawyers can now earn salaries comparable to partners at a mid-tier London firm.

Clifford Chance has around 3,800 lawyers worldwide, with 350 in Asia. Last year it sent Peter Charlton, head of the firm's corporate practice, to manage its Asian operations from Hong Kong.

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