The high-tech crisis looks like a fait accompli. Companies are struggling to raise money and some of them are shutting down, laying off employees or closing their Israeli branches. One of the law firms that is behind the scenes and has been serving Israeli startups for years is Pearl Cohen Zedek Latzer Baratz.
The international law firm, which has offices in Israel, the US, and the UK, has about 200 lawyers and patent attorneys - most of them in Israel. Adv. Zeev Pearl founded the New York office 20 years ago and is today the firm's managing partner. In an interview with "Globes," Adv. Pearl talks about how his firm supports tech companies from their founding, what he thinks about the current tech crisis and if it is affecting law firms. He describes the difference between law firms in Israel and the US, and explains how to manage a large law firm remotely, from thousands of kilometers away.
"So far the high-tech crisis is a mini crisis," Adv. Pearl calls the current situation in the tech sector. "We don't see a change in the amount of work, in patents and litigation. We see the companies being more cautious, and perhaps this cautiousness is good."
In answer to our question about similarities to the crises in 2000 and 2008, Adv. Pearl responds, "In 2000, there was a complete crash, in 2008 we thought that the entire system was collapsing. Maybe we are on the edge of an abyss and we haven't fallen yet, but maybe the abyss will be a puddle - and a fall of half a meter.
How does the crisis affect lawyers? He explains that the shock waves are being felt less in the intellectual property sector. "Big companies have to protect their developments and they are thinking in terms of 10-20 years ahead," he says. "In a situation in which a company is finding it difficult to raise money, they still ask for legal support. I don't think there is less work, perhaps there is more work on each deal."
We shifted to remote work before the Covid outbreak
Adv. Pearl talks about a range of differences between working as a lawyer in Israel and New York. He mentions a huge difference in costs, with legal procedures in the US ten times more expensive than Israel. The differences are not only expressed in costs but also in the nature of the work."
For example, the Pearl Cohen law firm began working from home before the Covid crisis. "We moved the entire office onto the cloud. It wasn't our invention, we learned it from American firms," says Adv. Pearl. "What happened after Covid was over? Here we see differences. In Israel they returned to the office and in the US, they didn't return. Do they need to come back? That's another question."
Another difference that Adv. Pearl mentions is the consultancy role of lawyers. "Israelis are much more involved and caring when it comes to the client's business. The client in Israel also expects advice that can be called semi-business. In the US, there is more separation, and the focus is more purely on the legal. In Israel, startup entrepreneurs expect advice that is not connected to drawing up the document but also on business parameters. It is not black and white but in the US, there is a tendency to stick to the job, as it is defined."
Setting out in the legal world 28 years ago
Adv. Pearl (60) set out in the legal world in 1994, when he joined the firm that he heads today. Since then the firm has undergone several reincarnations. Pearl Cohen includes three partners in Israel, the US, and the UK who work together in a broad spectrum of areas, from intellectual property and technology, to the capital market, infrastructures, and taxation. Among the partners are: Mark Cohen, Doron Latzer, Yael Baratz, Benjamin Baratz, and Dor Cohen Zedek.
Following the high-tech crisis in 2000, the firm began working on a "cross-border" model and in 2013 merged with the Baratz law firm - a step which enlarged it by 50%. Over the years, the firm hired lwyers that expanded its practice areas and over the past year four lawyers joined from the Eitan-Mehulal law firm, which closed down, as well as lawyers specializing in taxation and medicine.
The firm's clients include communications systems company Telit, software company NICE Systems, Alphabet subsidiary Verily, which deals with healthcare, green energy company Phinergy, Google, and UCLA.
The firm moved last year to a new building in Times Square and conducts legal proceedings in New York. The firm has successfully represented: Telit against Philips, which tried to prevent it importing to the US as part of a procedure with the US International Trade Commission (ITC) and in the Delaware court; technology company Actelis Networks in one of the few recent Nasdaq IPOs by an Israeli company; and Siemplify, which was acquired by Google for hundreds of millions of dollars.
"Israel is already less naïve in the field of patents"
Adv. Pearl specializes in intellectual property. In the past, he has said that Israeli companies don't know how to protect patents. And now he says, "Israeli companies are not naïve like they were when I started out. Companies have learned the importance of the US side of things. Most firms in Israel work with American firms." Pearl finds himself traveling between the US and Israel about once every two months. His partner Adv. Mark Cohen lives in Israel and flies to the US once a month and sometimes even more frequently.
How do you manage a firm remotely from thousands of kilometers away?
"Management is decentralized. There are work teams, each of which is headed by a partner. The reference group of an attorney in the office is the work group. We hold partner meetings once every two weeks on Zoom. Administrative functions are mainly located in Israel."
How long does it take to make partner at the firm?
"There is no cast iron rule. A lawyers of 7-8 years can certainly be paid as a partner. Then they can be promoted and become a partner in the profits, and generally later also be an equity partner among the group of owners."
Regarding the trend towards mergers, Adv. Pearl says that one of the main problems is a conflict of interests between potential clients. "Critical mass is important. I don't know how huge firms cope with conflicts of interest. This week we lost a big deal because we represent the other party on another matter."
What challenges do lsraeli law firms face?
"To be genuinely global. Clients want to sell in the US. In Israel there is too local an outlook. Instead of breaking through to the world and doing what NICE, Amdocs and Teva have done, the Israeli law firms market has not done this. Most firms work with American firms."
Adv. Zeev Pearl
Personal: Aged 60, married with three children, lives in New York.
Education: Expert in intellectual property, B.Sc. Geology and Chemistry, Hebrew University of Jerusalem; M.Sc. Chemistry, Weizmann Institute of Science; LL.B. Law, Tel Aviv University.
Something More: Loves nature and the sea.
Published by Globes, Israel business news - en.globes.co.il - on August 12 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.