Foreign firms set sights on Israel as legal market frees up
6 August 2012 | By Joshua Freedman
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Linklaters, DLA Piper and US firm Zeichner Ellman & Krause (ZEK) are among a raft of foreign firms setting their sights on Israel in response to the liberalisation of its legal market earlier this year and a potential upturn in M&A in the country.
The push comes alongside new regulations agreed earlier this year that allow foreign firms to practise the law of their home jurisdiction on the ground in Israel rather than merely establish representative offices for business development purposes.
The new rules also give the potential for foreign firms to merge with local outfits, producing practices that can advise on foreign and Israeli law, or to form an alliance with a domestic firm.
Neither Linklaters nor DLA Piper are currently considering launching on the ground under the new regulations or rolling out a merger, but today’s special report on the Israeli legal market details how roughly 20 firms from the US, UK and continental Europe are either applying for a licence or considering doing so.
Linklaters has sent an associate to the jurisdiction to source outbound work from Israeli companies and lay the groundwork for winning mandates amid new competition rules forcing conglomerates in the country to offload assets.
The magic circle firm deployed London corporate managing associate Daniel Turgel to Tel Aviv in late May this year for a significant proportion of his time to forge relationships, with the firm looking to win outbound instructions as well as roles on deals when foreign buyers come along to acquire Israeli assets amid Government plans to split companies’ financial arms from their non-financial ones.
City corporate partner David Avery-Gee, who co-heads Linklaters’ Israel practice alongside London banking partner David Ereira, said: “Over the past 12 months or so we’ve seen a significant increase in the number of international clients looking at opportunities in Israel. At the same time our Israeli clients have been more active across our international network. The pickup in activity has been striking.”
DLA Piper senior partner Tony Angel hosted a conference for Israeli law firm executives, general counsel, investors and diplomats in the Tel Aviv region in June, although tie-ups were not discussed.
London real estate partner Paul Jayson, who steers DLA Piper’s Israel practice alongside Washington DC partner Jeremy Lustman, said: “At the moment, if there’s a job that comes up, Israeli firms can do both [foreign and local] aspects. In terms of the overseas law firms coming in, I’m not sure there’s much desire to practise domestic law. If [a merger] happens, it will happen in the mid-market.”
Meanwhile, New York-based ZEK is set to open a foreign legal practice in the technology hub of Ramat Gan, on the edge of Tel Aviv, later this year, with the move following fellow US firm Greenberg Traurig’s Tel Aviv launch in January (6 December 2011).
ZEK litigation associate Daniel Rubel has emigrated to Israel to set up the base under the new regulations, with litigation partner Stuart Krause heading the Israel practice group from the US east coast.
Krause commented: “Ultimately, a firm from the US has the option of bringing in fully fledged members of the Israeli Bar and having a hybrid practice.”
Israeli firm Shenhav Konforti & Shavit & Co has also not ruled out a merger with US firm McGuire Woods, with which it has operated a co-operation agreement since 2011. McGuire Woods declined to comment.
The movement in the market follows Berwin Leighton Paisner’s opening of a representative office in Tel Aviv earlier this year, with the base used for business development (23 April 2012). Keystone Law has also expressed its interest in the Israel market (3 August 2012).
The Israeli market is showing signs of maturing, with a number of domestic outfits turning to management consultants or merger brokers such as GLawBAL.
For more on the Israeli market, see special report