Foreign firms are set to benefit from the widespread liberalisation of practice rights in Eastern Europe, after a number of key European Union (EU) accession states announced they are to implement the Rights of Establishment Directive.

Poland, the Czech Republic, Hungary, Slovenia and Estonia have all told the European Commission (EC) that they are implementing the directive ahead of the accession of eight Central and Eastern European states to the EU in 2004.

The 1998 directive allows EU-based lawyers to practise across the EU under their home title and protects them from unfair and protective local bar rules.

Although several key Central and Eastern European countries have allowed foreign firms to open offices in the region, until now they have imposed a variety of restrictions in order to protect local law firms.

In Slovakia, UK lawyers were not allowed to practise under home title and had to form 'non-lawyer vehicles', while in Hungary foreign lawyers had to form a link with a local firm.

Law Society of England and Wales international policy executive for Europe, Mickel Laurans, told Legal Week Global: "We welcome any progress towards improving the legal system in Eastern Europe. Many UK firms have been very interested in the region for a long time and it offers many opportunities."

The news follows last October's announcement by the EC that 10 new countries would be welcomed into the EU from 2004.

Allen & Overy, Linklaters, Lovells, CMS Cameron McKenna and Clifford Chance all have offices in Central and Eastern Europe.

US firms that have invested heavily in the region include Squire Sanders & Dempsey, White & Case, Altheimer & Gray and Weil Gotshal & Manges.