Only a few weeks ago executive director of the British Overseas Trade Group Peter Stiles returned from Jordan full of excitement.
He had been at the Middle East and North Africa Economic Summit in Amman where the mood was optimistic and Stiles was busy laying the groundwork for a delegation of City of London businesses to visit Israel.
Since the tragic assassination of Yitzhak Rabin, the immediate future of Israel and the Palestinian entity has become uncertain.
But Stiles feels that two factors – Israel's growing economy and interest from the City about investing in Israel – will help weather the setbacks. For the past year, Israel has attracted large firms from the UK because of its booming economy and its growing hi-tech industry. The potential for Israeli companies listing on AIM (Alternative Investment Market) has also generated an enormous amount of interest.
The Arab boycott and an unfavourable UK foreign policy deterred UK firms from investing in Israel, but the country's $70 billion a year GNP has attracted foreign investors. With the prospect of peace, a number of large UK companies, including Cable and Wireless, have staked a claim in Israel.
Cable and Wireless senior legal adviser Steven Grubb co-ordinated his firm's purchase of 10 per cent of Israeli telephone company Bezek. “From a legal point everything went very smoothly,” said Grubb.
Richard Schiffer is a partner in the Tel Aviv-based firm Zellermayer, Pelossof and Shiffer which handled the $25 million acquisition of Koor
(Israel's largest company) by Shamrock. In the past six months, he has been contacted by numerous firms who want Israeli legal expertise. “There's much greater interest than ever before,” he said.
UK law firms going into Israel face US rivals with more established links with Israel, according to Tony Herbert, head of the corporate department at Allen and Overy.
But Gavin Rabinowitz, who helped set up the Israel Group at Nabarro Nathanson, said Israeli companies may favour business with UK firms. “Israeli companies can spread their investments over here. We are on the same time zone. We have a less regulated market than the US and Israel company law is based on English law. We will treat the competition from US firms the same as we treat competition from anyone else.”
Howard Ross, of the Israel and New Middle East department at Clifford Chance, added: “We and Europe started a bit late. If the process continues to develop there will be work for everyone. Wherever there is activity, we want to be there.”
Ross' colleague Mark Kingston agreed: “There's a huge amount of Israelis looking for capital. Some are fly-by-nights, some are players. It is those who are able to find the big players who will be the winners in the legal market.”
Mark Hill, of Wavehill Consulting, which links UK law firms with business partners in Israel, said “Israel is an excellent market,” as it will soon be linked to EU funding in research and development.
Avraham Kelman, a partner at Fladgate Fielder, finds 40 per cent of his time is taken up on Israeli-related business.
But Israeli-born Kelman advises firms to “be aware of cultural and religious issues”. He explained that while Israelis often speak excellent English they are reluctant to put things into writing. “It may give you a false sense of security.”
Paul Millet, of Mishcon de Reya, said: “You need to be able to bring more than your legal skills to Israel. Just to say 'I'm a lawyer' is not going to get you any business.”
The promise of the Middle East now includes the newly formed Palestinian authority of Gaza and the West Bank.
Jeremy Carver, international law specialist at Clifford Chance, is involved with the authority. “We're trying to look at it in a more hard-headed way. We need to ask ourselves, what will our clients need?” However, he admits that the lack of an established infrastructure can be a problem.
Most agreed that success depends on co-operation. “The most interesting prospects I see are joint ventures between Israel and Palestinian communities,” said Carver. Rabinowitz added that UK law firms could work also together to build legal skills in the region. Schiffer agreed there is “tremendous potential” for UK firms to transfer legal technology.
With determination from law firms and investors, Rabin's hope for a better tomorrow will not end with his death.