UK law firms are being wooed by private equity houses looking to take a stake - meanwhile, in India, UK law firms are wooing Indian law firms for closer relationships.

The UK's Legal Services Act 2007 will allow external investment into law firms from 2011 and news wire Bloomberg has reported that private equity investors are already lining up to take advantage.

PE funds Fleming Family & Partners, Phoenix Equity Partners and Lyceum Capital Partners were reported by the news service to be interested or in talks to directly invest into law firms.

Apparently law firms make "attractive investments as they have stable cash flows, long track records of business operations and increasingly are much better run".

Most UK law firms are not convinced yet by the proposition - in the words of Allen & Overy's managing partner Wim Dejonghe to Bloomberg: "We looked into it, but decided it wasn’t right for us. Why would we need the money?"

That is a similar question many Indian law firms may be asking themselves when foreign law firms are knocking on their door although judging by the current mood in the profession it will still be a long time before private equity will be allowed into the legal business.