The year ahead is likely to see a spike in mergers and team hires among the top 100 law firms, with 20% looking to expand overseas, according to research published this week.

Sweet & Maxwell’s annual survey of law firm finance directors reveals that 40% of firms say they are planning to make lateral hires of senior teams from competitors in 2010, in contrast to the jobs cuts and recruitment freezes seen last year.

The research suggests there could also be a flurry of merger activity, with 10% saying a merger is likely, and 20% suggesting that they are likely to expand overseas.

The survey shows growth is expected in most work categories during the year, with the fastest increase expected in restructuring/insolvency, commercial litigation and fraud. However, public sector work is expected to contract substantially.

Finance directors list increased cross-selling to existing clients as the principle strategy for achieving greater profitability. Tighter credit control is the second most frequently cited option.

Some 43% of respondents said their firms are unlikely to increase their charge-out rates, while 20% plan to cut budgets of support functions. Only 7% said that further redundancies are likely.