Mallesons chief executive partner, Robert Milliner, told Lawyers Weekly yesterday that he is not concerned that the arrival of the UK giant will diminish Malleson's market position in Australia, and is confident they will still have the goods to compete with any newcomers.

"We will remain strong competition for any firm in this market, given our full-service capability, breadth of expertise and depth of top-tier legal talent," said Milliner. "More competition offers clients greater choice, so we welcome Allen & Overy to the Australian market," he said.

Freehills managing partner Gavin Bell also expressed little concern in the move, noting that "the Australian market has been competitive for a long time" and that the Allen & Overy arrival "hasn't changed what is already a very competitive market".

Chris Fogarty, a spokesperson for Allens Arthur Robinson said: "It's an interesting but not entirely unexpected development and we'll be watching closely how clients and the market reacts."

Minter Ellison's chief executive partner, John Weber, said he is not surprised to see the arrival of Allen & Overy and sees it as a boost to the already high quality legal services in Australia.

"We've been expecting for some time now to see new foreign entrants and ... this means the introduction of high quality competition in what is already a very competitive market," he said.

The announcement has not been met with such enthusiasm at Clayton Utz, where the firm announced the departure of 14 partners to Allen & Overy on Monday.