Indian lawyers are leaving traditional family firms in increasing numbers to set up niche corporate operations – which are then being courted by UK and US firms, new research has shown.

UK and US firms are keen to form ties ahead of the Indian legal market opening up to foreign lawyers. Indian law currently forbids foreign firms setting up in the country, but this ban is the subject of an ongoing Indian High Court action and is widely expected to be lifted.

The report, India: Opportunities in the Legal Services Market, by consultancy firm Hildebrandt International, suggested that UK law firms with specialist India practice groups and close links with local Indian firms were best placed to benefit from market liberalisation.

The report also revealed that almost 600 cross-border merger and acquisition deals involving Indian companies were completed in 2007.

Alison Hook, head of international at the Law Society, told the Gazette: ‘The niche corporate firms are being created for a variety of reasons, inter alia, frustrations among non-family partners in large Indian law firms who don’t see a level of ambition commensurate with the opportunities.’

Increasing client demand for specialist work and keen young graduate lawyers who are anxious to run their own operations were also driving the trend, she said.

The Indian government has already said it needs $500bn (£251bn) to fund future infrastructure projects.

The Law Society will host a visit by Indian law firms to the UK in September. A delegation from Birmingham Law Society will also travel to India in November to discuss opportunities with Delhi firms.