Friday, November 15, 2024

A Year of War: Law Firms in the Middle East Persevere

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A year has passed since Hamas launched its brutal attack in Israel, igniting a conflict that had long been brewing but has now erupted into turmoil and tragedy across the Middle East and beyond.

Hamas, which is designated a terrorist organization by the United States and several other nations, killed about 1,200 people and seized more than 200 hostages from inside Israel, according to the Israeli government. Israel’s ensuing war in Gaza has killed more than 41,000 Palestinians, wounded more than 97,300, and displaced about 1.9 million, according to Gaza’s Health Ministry. The fight has now extended into Lebanon, where Hezbollah, a Shiite Muslim political party and militant group, has fired thousands of rockets into Israel in support of Hamas and Palestinians in Gaza and Israel is responding with airstrikes targetting Hezbollah in Lebanon, where the death toll has now reached more than 2,000, according to Lebanese officials. The war also includes threats from Yemen’s Houthi rebels and the possibility of a conflict with Iran.

Amid this ever-expanding upheaval, law firms across the region have continued to function. But the cost of war has taken its toll.

U.S.-based Greenberg Traurig, a firm started in Miami in 1967 by three Jewish lawyers at a time when Jewish lawyers weren’t always welcome in Big Law, is one of only a few Am Law firms that has an official office in Israel. It marked the one-year anniversary of the October 7 attacks on Monday with a firmwide moment of silence that stretched seven minutes.

During those seven minutes, air raid alarms sounded in Tel Aviv, prompting the firm’s staff there to retreat to a safe room, Greenberg chair Richard Rosenbaum told Law.com International.

For some lawyers and staff in the Tel Aviv office—the firm has a total staff of about 30 there, including 18 lawyers—the year has had an emotional strain. Some have children serving in the military in Israel, where military service is compulsory beginning at age 18.

“We are proud of our colleagues” in Israel, said Rosenbaum. “They have dealt with this extraordinarily well.”

On the work front, Rosenbaum said that despite the ongoing tensions on the ground, the Tel Aviv office is profitable and has remained busy throughout the war.

Most of the work handled by the firm’s Tel Aviv-based lawyers, including transactions, disputes, intellectual property, M&A and capital markets, is cross-border in nature. The practices frequently intersect with those in offices in the U.S., Europe and Asia, and increasingly with Greenberg’s Dubai office, which the firm launched in 2023.

Jeremy Lustman, who is based in Tel Aviv and leads DLA Piper’s Israel Group, said DLA Piper’s Israeli practice also has remained busy, although in the fist first few months after October 7th most people were in shock and numb, and business was put aside.

Since the turn of the year, however, the flow of activity has been substantial, he said.

DLA Piper’s Tel Aviv office has a team of 10, including three lawyers. The Israel Group includes more than 100 lawyers across the firm focused on assisting Israeli companies doing business globally, DLA said.

“There certainly is some distress compared to last year, and we are seeing that in less funding rounds and in some reduced global expansion,” he said. “But at the same time there is a significant amount of transactional and expansion activity, larger average rounds for those that are closing, a decent number of new funds forming and some of the more significant M&A transactions in the last few years.”

All this has happened despite the fact that so many companies in Israel are tremendously understaffed, with many CEOs and employees having been called up to serve in the Israeli Defense Force reserves, he said.

The fighting in the Middle East has had a global impact, not just on business but also on college campuses across the U.S., law firm hiring practices, and an increase in hate crimes and antisemitism worldwide.

Lustman, a U.S. lawyer who is also qualified in Israel, said it has been a tremendously challenging year and practicing in Israel at the moment is incredibly emotional.

“At the same time, it has been a period of tremendous goodness and kindness, where literally thousands of charities or informal groups of individuals are doing something to help others,” he said.

Greenberg Traurig’s employees in Israel have also been active, organizing donations for humanitarian efforts and medical care, Rosenbaum said.

The picture in Lebanon, a country that was already grappling with multiple challenges, including economic collapse and the effects of the COVID-19 pandemic and the August 2020 Beirut port explosion, paints a different story, as the work environment of law firms has progressively deteriorated due to recent events, lawyers say.

“The October 7 event just added to an already heavy burden. So, in the past year, strangely enough, we haven’t faced any specific challenges as a law firm that changed our practices further, except in the last three weeks, where the nature, location and intensity of the bombings have impacted us,” said

Chedid Law Offices managing partner Elias Chedid, whose firm operates in association with Dentons in Beirut.

Lawyers say the recent bombing of Beirut has made the work environment increasingly precarious, with most firms noting they have shifted from full in-office operations to a hybrid model that includes remote work.

Chedid said that the multiple crises experienced by Lebanon, including the most recent bombings, has forced the firm to change how they work—billing practices, remote work setup, and dealing with government administrations, which became progressively dysfunctional over the past five years, though not completely shut down.

Tala Jamaleddine, a partner at MENA City Lawyers (MCL) in Beirut, which has 25 lawyers, including seven partners, said client activity had decreased in the past year, and the working environment had been unstable.

“We had urgent closures on some days, and on others, lawyers couldn’t attend the firm. Sometimes, courts would be declared closed for the following week. Overall, there has been no stability in our work over the past year,” she said, adding that the unpredictability affected the firm’s workflow.

Mohammad Ramadan, a partner at El-Aref Law Firm in Beirut with seven people in the office, said the disruption of public administration had affected their operations by 90%. The firm didn’t hire lawyers this year but kept the same compensation, he said.

Courts have been affected but they are still functioning, Chedid said. Judges who can will call and direct hearings, while those who cannot result in postponements. If a judge is present but a party is absent, no action is taken against that party due to extenuating circumstances. Hearings will proceed if the judge and all parties are present. Similarly, government administrations remain open if employees can attend to process applications. Previously, missing a hearing was a professional liability for lawyers, but now absences are understood as a result of the situation.

Over the past year, the psychological factor has played a significant role in the work environment within law firms in Beirut, lawyers said.

“Our work requires quiet concentration, so loud noises can cause fear. The whole office often reacts by moving away from the windows, and sometimes they can’t work throughout the day or have to leave early. This situation is psychologically affecting everyone in the country,” Jamaleddine said as the noise of Israeli drones flying overhead could be heard through the phone.

Meanwhile, law firms are trying to adapt. El-Aref’s Ramadan said his firm is reducing fees as many clients are paying by check or cash due to the ongoing economic crisis and war-related burdens. MCL’s Jamaleddine said her firm is also accepting checks and is trying to facilitate some payments by offering discounts and installments to help clients.

Chedid said his firm and Dentons have not yet considered relocating, but he added that it remains a possibility depending on how events unfold. If it becomes necessary, they would likely move to a safe area within Lebanon “if one exists,” he said.

“Dentons has been extremely supportive from the beginning, with daily emails asking if we need help. I’m confident they will support us if we face adverse consequences,” he said. “We’ve had a 15-year association with them. If we need them, I know they will assist us, though the capacity in which we may need them is still uncertain.”

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