The Polish law firm of Kamila Wróblewska published an article by the Israeli legal marketing company Robus, dealing with the Israeli legal system. Enjoy
Practicing law in Israel / Adv. Zohar Fisher
Israel is a relatively small country, both in territory and population (close to 8 million citizens), but there are currently more than 60,000 (!) lawyers in our small state, making it almost unbearably overpopulated with attorneys. Amazingly, there are more attorneys in Israel then there are in Japan, a country of some 130 million inhabitants…
In relative terms, the ratio of lawyers to the general population is currently 1:157 (for illustration, the American ratio in 2010 was 1:272) making Israel the country with the highest lawyer per capita ratio in the world. Therefore and understandingly, a lawyer’s life in Israel is not easy.
Israel has almost 15 higher education institutes with law faculties. Until the beginning of the 90’s, law degree in Israel was acquired in one of four universities. The demand of applicants wishing to be admitted was extremely high and therefore the admission requirements became the highest compare to other faculties, admitting only 15% of the applicants. In 1990, after an amendment to the law, three colleges were established. Nowadays, more than 10 colleges in Israel offer law studies.
Just as a side note, one may argue that quantity influences the quality, but we might add that Israel also holds the world’s highest number of PhDs per capita….
Becoming a lawyer in Israel nowadays is a journey of 4 years: the first 3 years are legal studies (LL.B.) which can be combined in most academic institutes with another degree, such as accounting, economics, business administration, etc’. The studies cost 10,000 NIS (~2,000 EURO) per year in universities, and ~30,000 NIS (~6,000 EURO) per year in private colleagues.
During these 3 years, the student is struggling with thousands of law students to find a proper internship for the last and final year (and one might add, the most important year).
The internship lasts one year, and it generally forms the practice fields and future events for the law student. The most desirable internship positions are the ones in Israel’s biggest and prominent commercial law firms, and the competition for getting accepted – is harsh.
After the one year internship, the soon-to-be lawyer will study for 4 month at home – and than go to the bar exam. Israel’s bar exam is divided into two sections- a 4 hours of multiple-choice testwhich will need the student to memorize most of the Israeli laws, including the small and apparently insignificance clauses. The test is very demanding, and about 30-40% fails it. The second section is an oral exam of 15 minutes with a panel of Israeli attorneys and a judge, which give certain scenarios to the student, which needs to analysis it and find appropriate legal solutions and applicable law clauses.
Passing those two exams provide the past student with a license from the Israel Bar Association, allowing him to start working as an attorney – in a law firm or even individually – currently, Israel did not set a certain time-frame of experience in order to open own practice.
As mentioned, a young Israeli lawyer will probably encounter some serious difficulties in the beginning of his career- there are significant gaps in salary levels between larger and smaller law firms. Therefore, one will almost always opt to apply for a position at the country’s leading law firms, hoping to get hired. The odds aren’t high though, since these firms usually demand rigid basic requirements such as excellence in academic achievements and an internship at a leading law firm or in a key position in the public sector.
The other option is to start a new self headed practice. Opening a new practice is allowed right after the formal admission by the Israeli Bar Association (a statutory entity, and the only bar association in the country); However, small firms may face fierce competition, as a result of the inflated number of practicing lawyers in the country.
Some law firms have taken this competition to the extreme, using manipulative competition strategies including cannibalization. This is 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 so harming the entire practice.
This recent phenomena resulted in the intervention of the Bar Association, which is currently promoting a resolution that will set a minimal fee rate in the real estate practice, as well as in other practices.
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 the US and 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 lawyer. Legal experts at prestigious law firms may charge a great deal more.
The national economic situation has a direct influence on its legal market. Due to its small territory and rapid growth of its population, Israel is suffering from a detrimental rise in real estate prices, especially in the main business hubs, Tel Aviv and Jerusalem. Since the majority of law firms are located in those cities and are expected to locate their offices in fairly upscale locations, smaller firms are having difficulties dealing with the rise in the cost of rent. Renting space for a practice is therefore becoming a serious issue for young attorneys.
However, the recent global financial turmoil has not affected the local economy as significantly and Israel is experiencing relative economic prosperity. This growth has trickled down to the legal market and profits have remained high. During 2011, the total revenue of Israeli law firms continued to rise although most of the growth can be attributed to the big firms.
In addition, the average salary rate in the Israeli law firms in 2011 was slightly raised, mainly due to a small growth in salaries at the leading law firms.
On the other hand, salaries at the smaller firms have decreased. The majority of the ‘victims’ are young lawyers with an experience of 5 years or less. These statistics demonstrate the increasing hegemony of the large law firms in the country.
It should be noted that a new reform from the Israeli Ministry of Justice was just approved-allowing foreign law firms to open branches in Israel, a scenario which will raise once more the number of attorneys in the country and in addition – will bring foreign standards and experts to the country.
At the moment, the future of the legal profession in Israel does not seem bright. Israel’s Bar Association have been publicly demanding regulatory intervention in order to toughen the qualification process for those interested in the legal profession.
Some of the problems which were mentioned above are similar to those that have been successfully dealt with in the American and European market by using affective legal marketing strategies. Learning from others’ experiences may therefore hold the answer to Israel’s young lawyer’s ominous future.
Adv. Zohar Fisher is the Ceo of Robus, an Israeli legal marketing company. Email: zohar@robus.co.il
