Since time immemorial, corporate lawyers have grumbled about the fees investment banks have been able to charge for dishing out corporate finance advice.

They have had to satisfy themselves with flat fees or time-recorded bills, while bankers have been able to negotiate a sizeable percentage of the value of the deal.

This desire to get a piece of the action has partly inflamed the thirst in some firms for taking equity instead of fees in new economy companies. The decision by Olswang partners to launch an independent corporate finance house is a logical extension of the shares for fees developments. LongAcre Partners focuses on Olswang's strengths in the technology, media and telecommunication sectors.

It will advise on strategy, fundraising and mergers and acquisitions.

The launch also recognises the fact that in the new economy, lawyers are becoming the first port of call for start-up companies and entrepreneurs.

There are plenty of reasons to believe that the new venture will be a success. With backing from a JP Morgan fund, LongAcre has credibility.

Olswang, which last month staked a claim as the fastest-growing major UK firm with 48% growth in
the last financial year, is also one of the best-placed firms serving the converged IT, media and telecoms industries.

Similar ventures in the US have also worked, with practices such as the Venture Law Group in Silicon Valley behaving more as a venture capital house than a law firm.

Meanwhile, the Big Five accountancy firms have had successful corporate finance arms for some time.

The potential loss to Olswang of referrals from established rival corporate finance houses, which might consider LongAcre a threat to their business, is probably limited. Although the firm significantly increased its institutional client base earlier this year by hiring a team of private equity lawyers from Berwin Leighton, led by partners Fabrizio Carpanini and Chris Mackie, its work is still biased towards acting for companies and entrepreneurs.

Olswang's move is still a gamble and the question remains as to whether LongAcre, however separate, will be a distraction from the firm's core business.

The firm's chief executive officer, Jonathan Goldstein, will also be chief executive of LongAcre, although the new venture will be hiring someone to take over the day-to-day management of the business. This will be fine, so long as the venture goes swimmingly. If not, it might prove a severe management headache.

In the meantime, Olswang's innovation should be applauded.