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Clifford Chance will become a New York limited liability partnership (LLP) when it merges with Rogers & Wells.
Rogers & Wells is a New York LLP, and managing partner Larry Cranch says keeping the US firm's protected status was a condition for the merger.
LLPs protect partners' personal assets from negligence claims against the firm.
They are allowed in almost all US states but UK LLP legislation is currently stalled in Parliament.
Cranch says CC found the idea of becoming an LLP attractive. The firm has shown an interest in LLP status for some time.
In 1994 it was sued for u610m by four Canadian banks for losses in connection with Canary Wharf. The firm is thought to have settled for about u10m plus costs.
Clifford Chance has been advising the Government, through the City of London solicitors group, on introducing LLPs in the UK.
Clifford Chance executive partner Garth Pollard denies that CC will become a New York-based firm. "As a partnership we do not have a concept of a head office," he says.
The change to New York LLP status will protect the assets of most of Clifford Chance's partners worldwide. "The English courts should recognise the LLP status under the law of the state in which the LLP is domiciled," says partnership expert Richard Linsell, head of Rowe & Maw's professions group.
Cranch says some of the new firm's 30 offices will be registered locally for tax or practical reasons but "the global partnership will practise law in the UK without being part of a sub-entity".
Linsell believes Clifford Chance's decision could have wider implications. "Let us hope this puts pressure on the Government to introduce the long-awaited UK legislation," he says.
He says: "Rogers & Wells partners, I would suspect, would not have been willing to drop their LLP status."