The Journal of Legal Marketing – Strategies- is the publication of the LMA (legal marketing association). The journal published in its February 2013 volume, an article by Robus, dealing with foreign attorneys enteringIsrael, and the fact thatIsrael is opening for legal competition
We are proud to be included in this highly respectable legal marketing magazine, and happy to placeIsraelon the map of legal marketing worldwide. The full article is shown below- for the PDF version please click here
Revolutionary amendment for Israeli Legal competition / Adv. Zohar Fisher
A recent revolutionary amendment to the Israeli Bar Association law recently passed, transferring the Israeli legal market into the 21st century, and accommodating the Israeli legal sector to the ever growing global habits. The amendment releases the cork of what used to be a sealed bottle and from August 2012 foreign lawyers and foreign law firms are now permitted to provide legal services in Israel
A few facts about Israel to begin with
Many Israeli companies are international by nature and work closely with companies from numerous countries across the globe. The startups industry inIsrael- often referred as ‘the Start-Up Nation’- has a unique influence on tech industries worldwide. Agriculture companies provide innovative solutions to countries around the globe and the list goes further, not mentioning the vast number of Israeli companies based overseas
Such tendency is part of the ‘global village’ environment we all live in, but forIsrael, a country small in territory with scarce natural resources, there are no alternatives but finding in-house and outsourcing solution for its ever growing financial and economical markets, as well as for its legal sector
The Israeli legal market adjusted itself to facilitate the needs of its clientele, acquiring a remarkable knowledge and experience in providing services to global operations, from M&A transactions, to complex distribution arrays, collaborations and agreements and so on, all meant for counseling Israeli companies operating abroad as well as foreign companies active inIsrael
The current timing for allowing foreign law firms to operate inIsrael- is quite surprising. The fierce competition in the Israeli legal market is already overwhelming, as about 60,000 lawyers serve a population of 7.5 million – the highest amount of lawyers per capita in the world
Some law firms have taken this competition to the extreme, using manipulative competition strategies. Such conducts are especially prevalent in the real estate practice, where some firms reduced their fees to less than 0.5% of a transaction’s worth – a non profitable rate according to any standards, and by doing so from pure competition reasons- they harm the entire practice. This recent phenomena triggered the intervention of the Israel Bar Association, which is currently promoting a resolution that will set a minimal fee rate in the real estate practice, in order to bind law firms not to drop under a certain legal fee
The new regulations and instructions
But the harsh competition in the overcrowded Israeli legal sector did not intimidate the Bar Association – and the new law was approved. If until now a foreign lawyer could only operate inIsraelafter being certified as an Israeli lawyer, the new enables foreign law firms to offer a wide range of services to the Israeli client
Such services may include consulting and providing legal opinions on matters involving international law and the local law of their respective country
Furthermore, they will be able to represent their clients throughout the negotiation process and manage their contractual matters concerning local laws of their country of certification. Logically, they are not permitted to represent before Israeli courts where Israeli law apply
Naturally, the new amendment comes with some regulatory instructions. Any foreign lawyer wishing to act inIsraelhas to be indubitably a member of a foreign bar association of which he claims of having expertise, in addition to having a five years minimum practical experience as a lawyer
Foreign lawyers are also required to register with the Israel Bar Association, pass an ethics exam, and generally speaking – being supervised by the Israeli legal authorities. Qualified foreign lawyers who meet those entry conditions, will be required to obtain insurance in the sum ofNIS2 million (~500,000 USD)
Foreign law firms may find legal fees as a problem while considering opening a branch inIsrael. Generally speaking, Law firms charge hourly rates that may vary according to an attorney’s experience, the size of the firm and the nature of legal work performed
The Israeli rates are not high in comparison to theUSand EU countries, and can vary between 75$ per hour for work done by a legal intern, to 250$ in the case of a more experienced associate. Legal experts at prestigious law firms may charge a great deal more, and foreign law firms should do their investment-profit math while considering opening a branch inIsrael, with regard to revenues estimation
Legal Marketing implications
Another consequence of the fierce competition in the Israeli legal market is the increased need for law firm marketing. However, the Israel Bar Association ethics committee has made it quite difficult for law firms to promote themselves using conventional advertising
The Bar’s ethic code is a set of complex rules which were initially enacted in the 1950’s, and were continuously amended since. These rules still fail to match the technological advances and the ever changing nature of the legal market
The Bar’s ethics committee imposes various limitations on legal marketing- advertising for law firms on television, radio and billboards is forbidden, as well as mentioning the names of firms’ clients. Advertising via direct mailing and other forms of proactive measures are also generally prohibited. On the other hand, marketing using the internet is generally allowed, but is subjected to various limitations as well
To conclude, it seems that although the harsh competition and the increasing number of attorneys inIsrael, the recent years’ steady rise in revenues in the legal sector as well as the stable economical growth nationwide, have proven that there will always be room for quality hand-tailored legal representation
Adv. Zohar Fisher is the Ceo of Robus, an Israeli legal marketing company (email: zohar@robus.co.il)
