Israel’s law firms are missing out on contract lawyers

Contract lawyer services have been growing in popularity, with firms such as Lawyers on Demand (LOD) heralded as innovators in the legal sector. Clients and law firms across the UK, Australia and Asia have welcomed such services, but the Israeli market remains largely untapped. This is set to change, however, as the country’s thriving start-up community seeks more flexible advisers.

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Israel’s first contract lawyer service, LawFlex, launched last year. Its founders – former Freshfields Bruckhaus Deringer associate Jackie Donner and lawyer and marketer Zohar Fisher – were cautious at first, and engaged with more than 40 firms before going into business. As a result, LawFlex clients include a range of Israeli law firms and in-house legal teams.

Screen Shot 2016-07-28 at 15.46.52Contract lawyer services give clients the ability to draft in additional lawyers during busy periods. In the UK, the use of ‘new law’ providers has become so popular that many top 100 firms now use contract law services such as LOD, or have launched their own. DLA Piper announced in November that it had struck a deal with LOD to offer clients a flexible resourcing capability. Spying a gap in the market, other firms such as Addleshaw Goddard, Allen & Overy, Eversheds and Pinsent Masons have launched their own contract lawyer offerings.

The new law business model also helps lawyers to achieve a better work/life balance. Many of the contract services set up by law firms draw on large numbers of lawyers from their pool of alumni.

In Israel, though, many of the top firms have shown scant interest in this innovative way of working. Indeed, some claim that they did not have enough to say to contribute to this report. Herzog Fox & Neeman and Meitar Liquornik Geva Leshem Tal were among those that declined to comment.

It seems likely that smaller firms, which are willing to adopt this way of working, will be the ones to reap whatever benefits stem from it. Epstein Rosenblum Maoz (ERM), for instance, is using LawFlex’s services to help its business.

Here, LawFlex founder Donner discusses the challenges that face firms entering the market and ERM’s head of corporate and M&A, Nimrod Rosenblum, explains why his firm uses contract lawyer services.

Israel’s traditional market ‘greatest challenge’ to contract lawyers

Donner-Jackie-LawFlex-2016Interview with LawFlex founder Jackie Donner

Q: What has been the greatest challenge your business has faced when introducing a contract lawyer service to the Israeli legal market?

The greatest challenge has been penetrating the conservative legal market in Israel. Israel has the highest number of attorneys per capita in the world, and yet it has a very traditional structure.

Our main goal at the first stage of our venture was to bring legal outsourcing to the Israeli market. We had to educate the market that legal outsourcing is cost-effective and that once integrated into the business model of the law firm, it can indeed have a big financial impact on the firm’s profitability.

We faced a first-user challenge of convincing the firms here that the outsourcing model works, both on the practical level – where we had to answer questions like “Can I trust someone that isn’t my employee?” and “What about conflicts checks?” – and also on the financial level, where we answered questions like “Will this help my firm to be more profitable?”

Q: Which areas do your contract lawyers specialise in and how many lawyers do you have on your roster?

Although LawFlex has been active for less than a year, we already have 72 lawyers on our roster and we are growing daily. Our high growth rate is a result of the attention we are getting from law firms that want to use our service and lawyers who are interested in working flexibly. Another reason for the growth is the pool of foreign attorneys moving their residence to Israel [a process known as ‘Aliyah’].

“Those who want to survive and thrive are adapting to the new way of working”

We predict that by the end of the year, we will have reached 100. We cover all practice fields except for criminal and family law.

Q: What types of clients do you service and why has the need for contract lawyers arisen in Israel?

We service the whole range of law firms in Israel, from the top 10 firms and down to boutique two, three-person firms.

The need for contract lawyers in Israel  has arisen for the same reason it has all
over the world – firms need to adapt  their business model in order to remain competitive. Even more so in Israel, a  country that has the highest amount of lawyers per capita in the world. Those  who want to survive and thrive are adapting  to the new way of working – ­flexing their workforce.

Technology and the new culture of creative work solutions has allowed for the trend to hit Israel as well.

Tough competition between firms in Israel is putting increased pressure on them to reduce their legal fees and maintain clients.

Q: How are you planning to develop your business over the next two years?

We’re harnessing the talent that has arrived in Israel on ‘Aliyah’ in order to be able to provide legal outsourcing services to law firms beyond Israel’s borders, mainly in the US, UK and France.

In the upcoming years, we see huge potential for LawFlex to become Israel’s
main provider of legal outsourcing services – and a key competitor in the global legal outsourcing industry with regards to the quality of service and competitive pricing –
all due to the fact that LawFlex has a unique combination of highly skilled lawyers working at low rates.

The time zone also means that the company can do, for example, due diligence and document review for US law firms, and the reports can be ready in the morning.

We are aiming to brand ourselves as a key legal outsourcing company, strategically placed on the talent and pricing axis to provide real solutions for firms.

Q: What strategies do you have in place to increase your client base over the next two years?

We plan to increase our client base by really adding value. In addition, our aim to service foreign firms with our local talent, qualified in foreign jurisdictions, will increase our client base.

‘It’s the firm’s reputation on the line’

Nimrod RosenblumInterview with ERM head of corporate and M&A Nimrod Rosenblum

Q: Does your firm use a contract lawyer service? If so, what is the reason for using it?

Our firm uses contract lawyer services, mainly on various big e-discovery and due diligence projects. We’re a corporate finance firm whose focus is on large-scale, cross-border transactions. We have a strong culture of working in small teams of highly experienced lawyers. On appropriate matters, supplementing the team with contract lawyers with a relevant expertise to engage in e-discovery and due diligence tasks can be a good idea.

Q: What was your biggest concern when considering the use of a contract lawyer service for your firm?

Our biggest concern is undoubtedly ensuring that the quality and level of service of the contract lawyers are appropriate. It’s our firm’s reputation that is on the line.

“We expect contract lawyer services to be familiar with our firm, our way of working and our level of service”

Q: How can contract lawyer services ease these concerns?

Easing this concern requires a twofold effort and contract lawyer services have a major role in that. Our duty as a firm is to ensure that the contract lawyer is duly supervised by our partners. This effort is not that different from the supervision of any of our lawyers and trainees, with the main difference being that we actually handpicked and trained our people. This is where contract lawyer services become significant and we expect them to be familiar with our firm, our way of working, our culture and our level of service, and only offer us people who could fit in.

Q: Has your firm considered launching its own contract lawyer service? If so, which areas of the market would you look to cover and when do you think you will be ready to launch such a service?

Indeed, we’ve considered this in the past as we see the clear advantages of having such service in-house. However, being a firm that is focused on high-end transactional work, we consider this to be too much of a focus-shifter and have therefore decided against it. Perhaps some of our largest competitors, who are less focused on large-scale transactional work, may find this more in line with their business plan.

We’re delighted that Jackie [Donner] started LawFlex and is doing so well – this way we can keep our focus and at the same time benefit from quality contract lawyer services.