New proposals to ‘cut through the regulatory maze’ inhibiting London-based international law firms and help them develop more unified global businesses have been published. The Solicitors Regulation Authority wants to give big cross-border practices more flexibility to operate in any form allowed in other countries, and also to incentivise foreign firms to make London their headquarters.

The proposals include allowing partnership in English law firms for lawyers in key emerging markets such as China and India who have not previously been allowed to become partners in solicitors' firms here. Last year, the SRA paved the way by opening a new requalification track in English law for foreign lawyers, the Qualified Lawyers Transfer Scheme (QLTS).

The SRA is also seeking views on whether to allow foreign (in particular European) firms more flexibility to choose whether to be regulated as foreign law firms or as English firms, depending on the services they wish to offer. ‘This would provide an attractive incentive for firms to be headquartered in London,’ the regulator said. ‘SRA recognition would provide the hallmark representing high professional standards and compliance, and this could be attractive to clients and other parties such as insurers.’

The consultation document, The Regulation of International Practice, sets out plans for global entity regulation, stressing that these will work just as well for small and medium-sized enterprises and niche businesses as for international firms wishing to develop global businesses.

Regulation would be simplified in that 160 branches of international law firms that currently have to register and comply separately with SRA regulations even when overseas, would instead come under a single international firm ‘passport to practice’.

Chief executive Antony Townsend said: ‘The SRA recognises the role of English law as analogous to a reserve currency - it is used by lawyers and clients around the world even where there are no English parties involved. We need to regulate in ways that maintain high standards and support the health and competitiveness of this sector of the legal market.

'Our proposals will help support the further development of England and Wales as a hub for global legal services. Foreign law firms with offices in England and Wales - mostly large US ones - would find their regulatory burdens reduced where they have branch offices or partners in other countries that are linked by a corporate structure to their headquarters in this jurisdiction.’

The consultation closes on 15 February.