Herbert Smith is in talks to tie up with Australia's Freehills, making the firm the latest in a growing list of leading UK players attempting to enter the strategically important market.

The two firms are currently holding exploratory discussions, with all options under consideration, including a full merger, a Swiss verein-style tie-up or a joint venture agreement.

Herbert Smith partners received an internal note in recent weeks detailing the firm's plans in Australia, which are still at an early stage and are not yet close to going to a vote of the partnership. The initiative is being led by London-based Australian corporate partner Greg Mulley.

Senior Australian lawyers have told Legal Week that Freehills held a vote at the close of last year canvassing partners on whether the firm should pursue discussions over a deal.

News of the talks comes after Herbert Smith last year held tie-up talks with Australia's Blake Dawson, which subsequently agreed a deal with Ashurst that is expected to see the two firms merge in 2014.

A Freehills merger would gift Herbert Smith new bases in Sydney, Melbourne, Perth and Brisbane, as well as two associated offices in Hanoi and Ho Chi Minh City.

Freehills also has a base in Singapore – where Herbert Smith has been since 1995 – and three further associated offices in Shanghai, Beijing and Jakarta.

In addition to Singapore, Herbert Smith's Asian network covers Shanghai, Beijing, Hong Kong, Tokyo and Bangkok and an associated office in Jakarta.

One Herbert Smith partner said: "There are talks going on at a very, very early stage and tentatively. It has not been discussed in a partnership meeting yet, and of course we have talked to other firms too. This is something that is on the agenda as a possibility at the moment, but there are a lot of different views about it internally.

"It would obviously give us a greater pool of lawyers in the Asia-Pacific region. Australian firms are currently being forced to review their strategies because of the number of global firms that are moving into the region."

A raft of other leading UK law firms, including Norton Rose, Allen & Overy (A&O), Clifford Chance (CC) and DLA Piper, have all launched offices in Australia over the last two years, with many targeting an Australian presence to help drive their wider Asia-Pacific strategies.

Australia's Deacons became part of the Norton Rose Group on 1 January 2010, with A&O and CC launching their own offices in the country soon afterwards. In February that year A&O recruited 17 partners – the majority of which came from Clayton Utz – to open new offices in Sydney and Perth, while CC sealed a tie-up with Perth's Cochrane Lishman Carson Luscombe and Sydney's Chang Pistilli & Simmons during the same month.

DLA, meanwhile, fully financially integrated with its Australian best friend firm DLA Phillips Fox in May last year. The Ashurst/Blakes tie-up, finalised in September 2011, will initially take the form of a joint venture, with the Australian firm set to rebrand under the Ashurst banner in March this year.

Herbert Smith and Freehills declined to comment.

Click here for Legal Week's in-depth analysis of the challenges facing Herbert Smith.

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