A separate compliance regime for big City corporate firms is to be considered as part of a profession-wide review of regulation, the Gazette can reveal.

The development comes amid indications that some of the UK’s biggest practices are considering alternatives to the existing system of regulation and representation.

The Law Society will today announce that it is to consider corporate law-specific regulation as part of a nationwide review that will ‘identify new approaches to regulating law firms’. The creation of a new regulator for large corporate firms to work alongside the Solicitors Regulation Authority (SRA) – or a specialist City group within the SRA – were suggested by Society chief executive Des Hudson as possible outcomes.

Outside the City, Hudson said there will be consultation with local law societies and regional meetings. These will examine how to ensure legal services are regulated ‘in ways that are effective for consumers, businesses and the legal sector, taking account of the very different requirements of diverse parts of the legal services market’.

‘Supervision of big firms is something that has long been of concern to the Law Society,’ Hudson said. ‘There are concerns that have been expressed about current regulatory arrangements, but no firm has said to us "you must have a review".

‘The City firms aren’t looking for an easy ride with a weak regulator. They need a system appropriate to their risks.’

According to Gazette sources, senior management at big corporate firms have held meetings at which the SRA – and the potential for breaking away should the regulator not accommodate their needs – was discussed. Hudson said he was aware of a high-level group that ‘met quarterly to discuss areas of mutual interest’.

The sources said the group was concerned that the SRA had not developed separate regimes for large corporate firms and small regional firms. Firms with a strong international presence are also understood to be concerned that the SRA is not looking at regulation on a global scale, and that as they continue to grow overseas, national representation by the Law Society is also becoming less important.

When asked why the Law Society rather than the SRA is conducting a review of regulation, Hudson said: ‘The SRA is not a legal person, it is a body of the Law Society. The obligation of the Law Society is to make sure the SRA is properly dealing with those tasks delegated to it.’