Asia has emerged as the key battleground for international law firms, with new research showing that nearly half of senior lawyers believe the region has the most potential for top UK firms.

The latest Legal Week/ EJ Legal Big Question survey found 44% of respondents think Asia offers the most potential as a legal market, followed by 26% citing the US and 7% the Middle East. Only 9% of lawyers cited Western Europe, underlining expectations that a decade of European expansion by London firms is largely at an end.

Sunil Gadhia, chief executive of Stephenson Harwood, told Legal Week: "We have four offices in Asia and the referral work goes both ways. Our presence there is highly important for clients who want to attract capital in the UK through, for example, a stock listing. And, going the other way, it is now much more important for UK businesses to do business in Asia."

Clifford Atkins, a finance partner at Shearman & Sterling in London, said: "China will become the biggest economic power in due course, so it is likely to be a very significant source of legal work. There is the potential for it to take the lead from the US, although that is some way off."

The US, however, is clearly regarded as the most important foreign region, cited by 49% of respondents in the survey of more than 100 senior lawyers, compared with 30% backing Western Europe, 14% opting for Asia and 5% for Central and Eastern Europe.

The poll also showed that the US provides UK firms with their most reliable stream of referral work. More than half (57%) named it as the region they received most work from, followed by Western Europe at 34%, Asia at 5% and the Middle East at 2%.

Nigel Campion-Smith, a corporate partner at Latham & Watkins in London, said: "The growth of the Alternative Investment Market (AIM) and the appetite for US companies to come to AIM has given us a new workstream, as a lot of smaller companies look to avoid the burden of regulations such as the Sarbanes-Oxley Act."

Conversely, when it comes to referring work on, the bulk of traffic is still going the other way, with 62% saying they send most of their work to Western Europe, 26% saying most of their work goes to the US and only 5% citing Asia.

Hugh Nineham, Lovells' corporate finance head, commented: "Europe is still our biggest cross-referral region, followed by the US, but for the corporate practice in my firm, the Asian market offers extremely exciting growth opportunities."