"This is a major event," says Clifford Chance's (CC's) Matthew Judd, summing up the mood in the City. "In many ways this represents the Holy Grail for funding."

Heady stuff by the standards of seasoned funds partners, but it is a long time since an innovation in corporate finance attracted as much interest as Kohlberg Kravis Roberts & Co's (KKR's) $5bn (£2.7bn) initial public offering last month.

Turning the logic of private equity on its head, KKR's Euronext-listed vehicle used public markets to raise funds and quickly sparked a rush by investment banks to sell the model to the transatlantic cream of the buy-out community.

Given the attractions of a float – a wider pool of investors, increased liquidity and creating a permanent source of capital for sponsors – it is surprising it took so long. Private equity lawyers have been fiddling for years with fund-of-funds models with limited success before KKR galvanised the market.

The debate now rages over whether the listed vehicle will turn out to be a fully-fledged revolution or passing fad.

That is a question that looks set to go unanswered until after the summer, with the combination of KKR's float and the current $1.5bn (£830m) fund-raising from Apollo Management appearing to have temporarily exhausted investor demand. In addition, current turbulence in European stocks has made sponsors more cautious, with Blackstone postponing its own float earlier this month.

Nevertheless, many lawyers believe the model has real legs, in particular for the 20-odd private equity houses that have the brand and diversification to shoulder the upfront costs and manage cash-flow problems.

As such, every legal team with pretences of buy-out credibility in Manhattan and London are currently working on these deals.

US advisers have a significant head start, having helped blaze the trail. As lead counsel to KKR and Blackstone, Simpson Thacher & Bartlett unsurprisingly cuts an imposing figure and looks in prime position to benefit from future work.

Cravath Swaine & Moore is another standout name, having worked with pioneer Goldman Sachs as underwriter on KKR and Apollo. The firm was also last year involved on the ground-breaking reorganisation of the Japanese assets of buy-out house Ripplewood, which resulted in a Belgian listing.

Other beneficiaries include the increasingly visible O'Melveny & Myers for Apollo, with the firm currently deploying a team under New York partners John Scott and Greg Ezring and John Daghlian in London. Cleary Gottlieb Steen & Hamilton, meanwhile, is believed to be working on a similar issue for Texas Pacific, while Latham & Watkins client Carlyle has made little secret of its interest in a public vehicle.

How much opportunity – and threat – the model will offer for London advisers will depend to a considerable extent on the Financial Services Authority's current review of UK listing rules for investment entities. If, as expected, the rules governing diversification are relaxed, London stands an excellent chance of supplanting Amsterdam as jurisdiction of choice.

Indeed, UK sponsors such as Permira, Candover and 3i were ahead of American counterparts in tapping public markets through London-listed investment trusts. With an established funds practice, Dutch capability and a top buy-out client roster, CC will be feeling confident of making a mark, while Linklaters did well to take the international counsel role on the KKR float.

Any advantage would be handy, because the last thing you want is the grail in your rival's hands.