In a move designed to increase the ability of foreign lawyers to practice law in Israel, the Minister of Finance has recently signed an order implementing an amendment which was made eight months ago to the 1961 Israeli Bar statute which governs Israel's legal practice. Under the new rules, in a matter of weeks, foreign lawyers will be able to work in Israel and to provide advice on issues concerning foreign law. However, the foreign lawyers will still be restricted from making any court appearances in Israel.

Whereas some Israeli practitioners consider it a threat, we view the decision as a blessing.

Having represented numerous clients in cross-border transactions and international arbitration, we believe this represents an important development which will be beneficial to both Israeli players on the international stage and international players in the Israeli arena.

Whenever foreign law is deemed applicable within the context of arbitration proceedings (whether conducted in Israel or overseas), we often engage a foreign lawyer with specialized expertise from a law firm which is based abroad to advise upon the application of the relevant jurisdiction's law to the facts of the case. However, until now, this foreign lawyer was precluded from directly dealing with and representing the Israeli client together with us in Israel, even if the arbitration had aspects which were of a decidedly international character.

Now, an avenue has been opened for true professional collaboration such as to allow an Israeli attorney to bring in a foreign lawyer to become an inherent part of the legal team tasked with counseling the client in an arbitration matter and also in an international transaction. This allows for the pragmatic combination of different lawyers with different areas of expertise in different systems of law to jointly provide top-notch representation to the client.

I strongly believe there is an important role for foreign lawyers to play within the Israeli market to enhance the services being provided to Israeli and International clients involved in complex international transactions and/or litigation. This is indeed a natural step in our increasingly "global village" which sees Israeli companies strengthening their relationships with customers and businesses abroad, and vise versa. This commensurately increases the need to abide by the legal framework of both Israel and the foreign countries which may govern the transactions and disputes arising from these relationships.

It should be emphasized that this is not a trivial matter only of concern to lawyers, but rather is important to the wider business community as well. Businesses will now be able to realize the economies of scale which may be achieved by retaining Israeli and foreign firms to work together rather than separately.

We believe that despite the increased ability of foreign lawyers to service Israeli clients, any fears on the part of the new rule's detractors that this will lead to intense and disorderly competition in the Israeli legal market appear to be overblown and exaggerated. On the contrary, we expect the new rule will facilitate a situation where foreign firms wish to work in tandem with and to complement existing Israeli firms.

For the Israeli Bar publication in this regard an review of the translated amendment of the Bar Association Law, see:

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