Around 25% of firms in the UK top 40 are considering a tie-up with a non-legal practice within the next two years, according to research by accounting and consultancy firm Smith & Williamson.

Of the 21 top 40 firms that responded, nine said they were considering a combination, of which three described such a move as 'likely', with accountancy firms the most attractive potential partners.

Six top 40 firms also confirmed they are considering taking external investment, with five of these looking for private equity funding. 

In order to take on external funding, the firms would first need to convert to an alternative business structure (ABS), with 89 so far converting since January 2011. 

Irwin Mitchell, the largest law firm to have made the ABS switch to date, has yet to take up the option of external investment, with a previously mooted initial public offering still an option for the future.

Firms outside the top 40 to have secured private equity backing include Keoghs, Parabis Group and Knights Solicitors, which last summer sealed an investment from private equity house Hamilton Bradshaw.

Knights managing partner David Beech said: "These figures don't surprise me, particularly in the current economic climate, and they point to a shift in how law firms are starting to think about realising their future growth. Any firm considering taking on external investment has to be prepared to do things differently which, for us, meant moving away from the traditional partnership model."  

Shoosmiths chairman Andrew Tubbs (pictured) added: "Within an ABS environment, clients will still look to the law firm to take responsibility for top levels of client service. Law firms will need to ensure quality control of any non-lawyer entities."

Smith & Williamson's head of professional practices Giles Murphy said: "Given that the LSA provides an additional source of funding, we should expect to see firms taking advantage of this in the near future as a way of funding an acceleration of growth through acquisitions and team moves."