When it comes to external investment in law firms, there is a lot of speculation and not many hard facts about how firms are planning to approach the new opportunities that will be available to them next year.

While last month the Gazette reported that private equity was switching its focus from law firms to legal process outsourcing providers, this week we learn that two large firms are already busily setting their ducks in a row to make sure they have the corporate structures in place to be able to accept external funding, and are having discussions with interested investors.

Firms’ intense secrecy over their intentions is wholly understandable; no practice wants to tip off its competitors that it is seeking to accumulate a nice big war chest with which to poach their rivals’ biggest billing fee-earners, or that it is about to open a flashy new foreign office. But it does make it hard to judge what the impact of the Legal Services Act 2007 will really be.

In June, we reported a prediction by Jon Moulton, managing partner of private equity firm Better Capital, that the act would be nothing more than ‘a big whimper’.

But as the new rules on outside investment grow closer – and are now not much more than a year away – there is a growing sense that legal services reforms could turn out to be a big bang after all.