The Law Society has criticised government proposals to limit business migration which could complicate international recruitment for UK law firms.

As part of a wider review of UK immigration policy, the Government is currently considering ending the automatic right for migrants holding Tier 2 visas to apply for permanent residency after living and working in the UK for five years.

The Law Society has said that these plans could negatively affect the competitiveness of UK business, as many large City firms rely on the expertise of skilled migrant workers from outside the European Economic Area (EEA).

Law Society president John Wotton said: "Law firms turn to the international market because they are engaged in a global competition for talent with international firms from other jurisdictions, such as the US. Global legal businesses are interested in recruiting only the best talent. Non-EEA migrants employed by law firms tend to be high earners. They will be spending their disposable income and paying taxes in the UK."

Further stringent conditions on UK immigration are likely to affect many law firms as they will be less inclined to invest in bringing people into the country if there is uncertainty over whether they can remain in the country on a long-term basis.

PricewaterhouseCoopers partner and head of global immigration Julia Onslow-Cole commented: "Our clients are certainly telling us that the cap is having an economic impact, as organisations have had to delay hiring key individuals and consider relocating roles overseas."

Many law firms also train international staff in London with a view to returning them to their country of origin to be better able to serve local markets.

Clifford Chance senior partner Malcolm Sweeting said: "Lawyers with strong roots in growth markets will become very valuable, and in some of these markets legal capacity is not keeping up with the pace of economic growth.

"As a result it will be incumbent upon us to help to create the right legal talent for those markets to allow them to grow successfully. Movement of lawyers within international law firms will therefore become increasingly important, but in the UK this remains subject to immigration laws."

The proposals are part of the Government's commitment to reduce the level of net migration to the UK to tens of thousands by 2015.