Israel might be home to the law of the prophets, but these days, it's becoming a land for making profits out of the law. A wealthy high-tech sector and one of the most educated labor pools in the world make it into an exciting economy with numerous opportunities for commercial lawyers — and not just technology specialists. And following a deregulation taking place three years ago, the Israeli market is now open for business to foreign law firms.
The Local Legal Market
Israel has a remarkably rich legal market for a country of only 8 million people and with territory not much larger than New Jersey. With around 60,000 registered lawyers, it has more lawyers per capita than any other country by quite a distance. The latest estimates indicate there are around 126 citizens per lawyer. Many of the leading Israeli law firms are large and mature and operate internationally.
The profession in Israel is still conservative, but it is being forced to change. Since 2012, foreign law firms have been permitted to open active offices in Israel to practice the law of their home country. A number of UK and U.S. firms have already taken advantage and opened a base, a few examples being international law firms Greenberg Traurig, DLA Piper, Freshfields and Berwin Leighton Peisner (BLP), as well as Chinese firm Yingke, which launched in the country by combining with a tech-focused Israeli law firm.
The Second Silicon Valley
The main attraction of Israel to foreign investors is its high-tech sector. Israel is perhaps the second most important hub for technology start-ups in the world, after Silicon Valley. Another world record Israel can claim is “the most start-ups per person.”
According to Dan Senor and Saul Singer’s 2009 book “Start-up Nation: The Story of Israel's Economic Miracle,” there were 1,844 citizens per start-up in Israel. Not surprisingly, companies such as Google, Amazon, Microsoft and Dropbox have bought up Israeli tech enterprises in the last two years, and the influx of cross-border tech M&A is ongoing.
This is one of the main areas keeping leading lawyers busy in Israel. The success is largely driven by the entrepreneurial culture of the relative young state, and the fact that a lot of Israelis go through the intelligence and technology units of the Israel Defence Forces.
Some of the most successful start-ups have been smartphone app developers, while the life sciences, online advertising optimization and cyber security niches have also seen some big sales in the past few years.
More than Just High-Tech
There have also been other busy areas outside of technology. Israel’s largest food company, Tnuva, was bought by China’s Bright Food in 2013 for around $2.5 billion, a huge deal by Israeli standards. Real estate in Tel Aviv, the main commercial city, is big business and has seen some major price increases. Natural gas has also been added to the list of Israel’s economic assets after the discovery of large reserves off the Mediterranean coast in 2009 and 2010.
Lawyers and business people in Israel have been benefiting from a relatively stable economy, largely thanks to careful and cautious steering during the global financial crisis in the late 2000s.
Despite suffering from some internal socio-economic issues, such as a considerable wealth gap between layers in the Israeli society, Israel has by large enjoyed impressively strong economic foundation in the last decade.
Opportunities for Foreign Lawyers
While the impact of foreign law firms is still relatively slow, the attraction of Israel is strong. Be it for business or personal reasons, foreign-based lawyers around the world are increasingly considering immigrating to Israel and opening up a legal practice in the holy land. Many of them join the ever-growing M&A scene in Israel, particularly focusing on cross-border M&A, while others practice other internationally oriented legal fields.
The exposure of foreign lawyers to Israeli clientele has also grown a great deal in the past several years. One peak of this trend occurs in Israel's Foreign Law Firms Conference, a series of annual conferences taking place in Tel Aviv and organized by Robus and the Israel Bar Association. The last conference took place in December 2014 and was attended by more than 400 foreign and Israeli law firms — out of which, 85 representatives came from foreign law firms around the globe, including the United States and the UK, but also China, Korea, Panama, South America and all around Europe.
Israel is growing as an attractive proposition for foreign law firms. Its local firms are not doing too badly either, especially if they act for the big technology companies. With the country’s start-up sector going from strength to strength, Israel is likely to become even more interesting to attorneys over time.
Adv. Zohar Fisher is the founder of Robus, Israel's leading legal marketing company, that represents Israeli and foreign law firms alike.