US-based international law firms face a future as subsidiaries to English firms unless the US adopts English-style regulatory reforms, according to the chief executive of a firm operating in 46 US states.

Michael Skoler, of The Law Offices of James Sokolove Law, said that the US’s 50 state bars must amend their rules in reaction to the opportunities that the Legal Services Act 2007 presents to English firms.

‘It is imperative that US firms change. If they do not, they will be hampered in their ability to compete globally and will wind up being subsidiaries of UK firms that have access to capital investment,’ he said.

‘Access to capital allows firms to compete more in terms of acquisitions and attracting new hires.’

Apart from in Washington DC, non-lawyers cannot own equity in US law firms, Skoler said. However, despite resistance from the traditionally conservative legal sector, he said that English-style changes could be introduced across the Atlantic in as little as five years.

In the meantime, he said, US firms based in the UK would have to become separate entities from their American headquarters in order to take advantage of the Legal Services Act.

However, one legal business expert described Skoler’s prediction as ‘highly questionable’. Giles Rubens, specialist law firm adviser at business consultancy Hildebrandt, pointed out that two-thirds of the world’s 200 international law firms are American. Even if English law firms’ ability to attract outside investment places them at a competitive advantage, the model may not be exportable, he said. ‘There is a great deal of complexity in the UK changes that is still to be fully explored, and which raises all sorts of questions for international firms.'