The move is being interpreted as one of Turkey's many preparatory moves to gain entrance to the European Union.
In reality, foreign firms have been practising international law in Turkey for more than a decade. White & Case set up an office there in 1985 and Scottish firm Ledingham Chalmers has been in Istanbul since 1992. Altheimer & Gray opened in Istanbul in 1994 and Gide Loyrette Nouel followed in 1997. All advise principally international clients. Multinationals such as BP and PepsiCo top the list of companies to have used Turkey's foreign firms.
The move is seen as a formal acceptance of foreign firms into the country.
Guillaume Rougier-Brierre, managing partner of Gide's Istanbul office, said: “Before, we were always tolerated but never official.”
The law details what seem to be major changes, but Rougier-Brierr said “in practice it will not change much”.
The law states that Turkish lawyers who work for international law firms can practise only international law. If they do choose to work for an international law firm, they will be forced to give up their membership of the Turkish bar.
But international law firms also have the option of setting up a separate, but associated, Turkish firm. White & Case is already associated with Turkish firm the Derman Law Office and Gide has set up a separate legal entity for its nine Turkish lawyers called NCE. It is not clear how this regulation will affect the two other major international firms in the area, Altheimer & Gray and Ledingham Chalmers.
The new law also states that international firms in Turkey must include the names of one of the resident solicitors in their titles. But firms do not necessarily have to include the name of a local lawyer as they now do in Bucharest, Romania (The Lawyer, 20 August).
“The economic climate is not good, in fact the economy is, in many ways, in crisis”
Jonathan Blythe, Ledingham Chalmers
Rougier-Brierre said: “I think we will insert the name of one of our lawyers into the title Gide Loyrette Nouel, but we will not lose our brand name.”
It is unlikely that the move will lead to a flood of interest from Western firms.
Jonathan Blythe, the former head of Ledingham Chalmers' Istanbul office, said: “The economic climate is not good, in fact the economy is, in many ways, in crisis. We've seen some of our clients downsize and some international companies, such as those in the manufacturing sector, have left Turkey altogether.”
But both Blythe and Rougier-Brierre are confident that their firms will not begin to lay people off or send foreign lawyers home, as happened in the 1998 Russian financial crisis.
“We aim to stay a full service office and do not see ourselves leaving Turkey,” said Rougier-Brierre. “Once you leave Turkey it is very difficult to come back.”