During the ceasefire Northern Ireland was the subject of unaccustomed interest and growing investment from outside businesses, solicitors' firms included.

After the resumption of IRA bombings in London last month the success or failure of the all-party peace talks scheduled for June 1996 will probably determine whether this new enthusiasm fades or remains.The opening last week of a Belfast branch office by City firm Kennedys suggested that the so-called peace dividend still appeals.

Before Kennedys arrived, only one other firm from outside Northern Ireland's jurisdiction, Dublin-based Arthur Cox & Co, had established a physical presence in Belfast.

Since last autumn, another major Dublin player, A&L Goodbody, has developed a formal working relationship with Belfast firm Elliot Duffy Garrett, but has not set up its own office.A second London City firm, Travers Smith Braithwaite, has been rumoured to be planning a branch office in Belfast.

News of its having rented offices has circulated widely.

Yet Alan Keat, TSB's senior partner, sought to scotch the gossip.

He said: 'We have no plans to set up an office in Northern Ireland.'Since the 1994 ceasefire, talk of several large outside firms moving in has aroused fears among smaller Belfast firms.

Michael Dickson, Goodbody's commercial partner, cited sensitivity to local concerns as important in his firm's decision to link up with a Belfast firm rather than set up on its own.

'You're going into a close knit community.

We thought it would be more acceptable to be alongside an established firm.

Ours is a strategic venture and by no means driven by the bottom line,' he said.James O' Dwyer, chairman of Arthur Cox, said: 'Obviously people will always guard their own territory, but that's to be expected.

It's a relatively small jurisdiction and the environment there is quite competitive.

But we are doing we're what doing for reasons that make good sense to us with regard to our client base.'Northern Ireland Law Society (NILS) president George Palmer was bullish about facing up to any new competition.

Est ablished Belfast firms had the advantage of years of contact with their local clients, he said.

'We are not going to pack up our tents and disappear just because the London boys are coming in,' he added.Some Belfast solicitors harboured suspicions about the timing of the new arrivals to the city, although both Arthur Cox -- which set up shop in January this year -- and Kennedys have insisted that they planned their moves before the ceasefire.

Each said they would continue whatever the political situation.

'Business continues with or without a ceasefire,' said Arthur Cox's Mr O'Dwyer.Mr Palmer was not entirely convinced: 'We are obviously a little cynical that they're appearing at this time.

It's only since the bombs stopped going off and the bullets stopped flying that we've been faced with this competition.

We were looking forward to reaping our own peace dividend.'Alongside these reactions, the arrival in Northern Ireland of firms from the nearby jurisdictions of England and Wales and the Republic of Ireland has raised questions with which the relevant professional bodies have just begun to grapple.

'The idea of anyone practising in two jurisdictions at once is very new and we are feeling our way on avoiding possible difficulties that may arise,' said Michael Davey, secretary to NILS.The cross-border protocol between the jurisdictions has focused mainly on the recognition of qualifications.

At a recent meeting of the heads of the four 'local' societies (including Scotland), it was agreed that the protocol should be re-evaluated.Mr Palmer's main concern was the implications for professional indemnity insurance and compensation in cross-border operations, although he stressed that research on the matter had not yet been done.

Unlike England and Wales, Northern Irish solicitors are members of an approved scheme where indemnity insurance is purchased in the marketplace.He gave the hypothetical example of a London firm with an office in Belfast which referred a large commercial transaction to its head office.

'If anything goes wrong with that transaction, where does the responsibility lie for that transaction? We are a small jurisdiction and certainly don't want to be carrying such claims against our compensation or professional indemnity funds,' he said.Both of the recent cross-border arrivals were anxious to stress their credentials.

Four of the five lawyers sent to Kennedys' Belfast office were themselves qualified in Northern Ireland and of course contributed to the compulsory indemnity scheme there, said Nick Thomas, a construction partner and head of the branch office.

'We have taken steps to avoid any future problems by covering our staff with a considerable amount of top-up insurance, which applies in both jurisdictions,' he added.This also applied to Arthur Cox, said Mr O' Dwyer.

All work done in the Belfast office was done by Ulster-qualified solicitors.

Over and above the compulsory Northern Ireland indemnity cover, the firm maintained a policy in Dublin which offered 'substantial' cover to employees working in its Belfast and New York branches, he said.The arrival in Belfast of two outside firms in the space of two months has understandably provoked concerns among the city's solicitors.

With a rapid restoration of the ceasefire increasingly in doubt, the expected economic fall-out in an already competitive market would probably increase caution among investors, predicted Ken Murphy, president of the Law Society of Ireland.

'For many years the Troubles meant that international law firms had little interest in establishing branches in Northern Ireland.

I suspect that we're talking about people putting their toes in the water rather than complete immersion,' he said.