UK firm Kennedys is planning to set up shop in Melbourne, after its first Australian office opened only three months ago in Sydney.

"We have proposed to open other offices in Australia," says Mark Doepel, managing partner at Kennedys' Sydney office.

Even before the Sydney branch opened for business, talks were initiated with lawyers at other firms for a Melbourne division. "Four months ago, we started preliminary talks with Melbourne lawyers and they are very interested. We are still talking."

Doepel indicates that there is no set date yet to open the office, but expects to do so within one to three years.

"London is dedicated to growth in Australia and understands that means opening more offices," he notes. "We will have to wait until the time is right. At the moment there is still a bit of work to be done in Sydney, such as sorting out the systems."

The proposed Melbourne branch will be part of Kennedys as a fully integrated office. It will focus on areas for which the firm is known. "At the moment we are looking at insurance and commercial litigation," says Doepel.

There are no plans to open in other cities in the country.

Critics say that the Australian legal market is overcrowded and that new players have to make serious sacrifices to open new offices. But Doepel does not believe the market is too tight to allow for another player in Melbourne.

"I think there will be a flight to quality," he says. "Not many firms can offer the quality of services we offer, at the rates we offer. We have some of the best insurance lawyers in the country against some of the best tariffs."

The Sydney branch of Kennedys started business on 5 June; its official opening is scheduled for 26 September. The office counts 20 fee earners, of which eight are partners. It also has eight solicitors and Doepel is looking to expand this number by another two or three this financial year.

Kennedys focuses on commercial litigation and in specific on insurance litigation, but also has strong media, medical negligence and sports practices.

As an area of growth, Doepel has his eye on employment law. "Kennedys has a strong employment law practice in all of its offices," he said. "It would fit nicely in with the others."

Kennedys recently opened a branch in Madrid and will next week officially open in Dubai. It has six offices in the UK, of which three are located in London.

Other cities in which it is represented are Hong Kong and Auckland. Associated offices are located in New York, Paris, Dublin, New Delhi, Mumbai, Karachi, Lisbon, Warsaw and Abu Dhabi.

According to figures published in The Lawyer, Kennedys had a turnover of A$103m for the 2004/05 financial year, with average PEP of A$741,000 while partners at the top of the equity were looking at taking home A$1m.