Two of the UK’s top-30 law firms are putting formal arrangements in place to take on private capital next year, the Gazette has learned.

Jane Galvin, head of professional services at Barclays Corporate, said in an interview with the Gazette this week that two ‘brave souls’ among the top-30 law firms are in the early stages of planning unique changes to their corporate structure.

These changes, which would come into effect once alternative business structures (ABSs) are permitted in October 2011, will enable the firms to pursue external investment.

As a division of Barclays bank, Barclays Corporate, which lends to law firms whose turnover is above £5m, is discussing private equity investment and stock market listings with a number of the UK’s top firms. Executives from Barclays Capital, the bank’s investment banking arm, have joined firms’ senior management for the discussions, acting as brokers for interested private equity firms.

Galvin predicted that the first UK law firm flotation will take place in the next two years.

‘Quite a lot of firms are exploring changes, but only a few will make the move,’ she said. ‘Some firms are just finding their feet and want to be educated, while others are further down the line.

‘Top-30 firms are the most interested at the moment. The bigger the beast, the longer it takes to make changes. Between the top 30 to 75 firms, a few are finding their feet. But firms in this range will be able to move quite quickly.’

Meanwhile, UK law firms looking to benefit from ABSs will not be permitted to practise in the US when rules allow them to transform.

The American Bar Association told the Gazette that it will not make any decision on whether to permit ABSs until 2012. This could affect City and national firms with a US presence that are looking to become ABSs.