Talent shortage and bureaucratic delays worry Israel's lawyers

Israel's legal profession has recently been undergoing far-reaching changes. There is an ongoing trend of mergers between small and large law firms, a process of consolidation that is at its height, and there is tough competition with the high-tech companies for talent, which has led some firms to change their work conditions. A survey conducted by international database company Statista of more than 2,400 lawyers and clients reveals the industry's current concerns.

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1. Large firm or boutique? Most clients have no preference.

One survey question addressed to clients was the type of law firm they preferred - large or small. The results showed that 58% of respondents among clients (primarily corporate legal departments) said they had no preference for a large firm over a boutique one. 27% said they preferred a boutique firm, while only 15% said they preferred a large, international firm.

Those who preferred boutique legal firms said that personal and intimate attention determined their choice. Investment in the customer, personal contact, consideration, and availability are important to them. "They put a lot into the client and you don’t fall between the cracks," one client noted. Another said he "prefers to be an important client who receives VIP service and not just another client." However, one person noted that boutique firms were suitable only for small-to-medium-sized matters and that he would prefer a large firm for major deals.

Clients who preferred the large firms said their advantage lay in the ability to be a "one-stop-shop" - providing service in all areas. Those clients also noted the experience, professionalism and vast resources that large firms have, as well as a sense of security. Reputation also plays a part. The clients commented that large firms, "sounded better" and "have higher chances of winning."

2. Most important to clients: Professionalism and integrity

The survey also examined what qualities were important to clients when choosing a law firm. This question was addressed both to lawyers ("In your opinion, what qualities are important to clients"), and to the clients themselves. The answers indicate that the most important quality for clients is the professional ability, expertise or industry knowledge of the firm (70%). Among lawyers, 91% responded that this was the most important quality for clients.

Another important aspect is the firm's integrity. This was cited by 58% of clients and 56% of lawyers. But lawyers viewed recommendations of their firm as more important than did clients: 68% of lawyers cited this as important, compared with only 49% of clients.

The chemistry between client and law firm is also important. 37% of clients indicated this, as did 53% of lawyers. Additional attributes noted by clients were hourly billing (25%), physical proximity (14%), and international office presence (9%).

There is a significant gap between clients and lawyers regarding the importance of the firm's image. While 41% of lawyers indicated that image was important, among clients, only 24% indicated it as important.

Clients and lawyers noted the importance of availability, quick response, good interpersonal skills, and the firm's network of connections.

3. The legal system's biggest problem: Institutional bottlenecks

The survey asked lawyers to indicate what they saw as the biggest problems in the legal system. 67% responded that the biggest problem was a bottleneck within government agencies. 45% indicated that the problem was insufficiently professional lawyers, and 22% cited imprecise laws on the books. 9% of lawyers addressed a variety of legal system problems, including the quality and conduct of judges, over-regulation, and the hourly billing structure.

Regarding the quality of judges and their conduct, the lawyers noted that the judicial system measured judges by output, thus creating an assembly-line of cases closed through settlements and arrangements. This, they said, came at the expense of conducting proceedings through to their conclusion, and having the judge rule after hearing the evidence in the case.

Another problem mentioned was inconsistent rulings by courts, and judges who passed verdicts according to values and policies, and not according to the law; and insufficiently professional judges who did not read materials and did not present risk mitigation options to the parties.

Another criticism was of rulings that award unrealistic payments, and the practice of lawyers of adjourning hearings, leading to drawn-out proceedings. The lawyers further note the fact that fees have eroded over the years, and that the hourly billing structure leads to inflated costs and unwanted legal actions. Another problem cited was the attitude of clerks with no service mentality and no motivation to assist.

4. The developing situation: A shortage of talented attorneys

55% of the lawyers surveyed said that the shortage of talented staffers was the development that would most affect law firms in the coming years. Some explained that the profession was flooded with substandard lawyers, as well as competition with other market sectors, with lawyers leaving the industry for high-tech in particular. In their opinion, the work culture at law forms must change. As one respondent put it, "There's no shortage of skilled people, and if the firms learn to pay properly, people will stop running off to other sectors."

45% of the lawyers responded that digitization would affect law firms in the coming years and referred, among other things, to artificial intelligence (AI) applications that will replace traditional lawyering.

Most of the lawyers who participated in the survey think that AI will replace up to 30% of lawyers' tasks. "Legal-tech", which makes use of AI, has been gaining momentum in recent years, with traditional lawyering tasks performed by technological tools. Some law firms that have discovered the benefits of this development are using these tools, primarily for due diligence, which involves scanning thousands of documents.

There are also AI programs that draft complex agreements, not yet widely used by law firms, evaluation tools designed to ensure clients meet Anti-Money Laundering Law requirements, programs for advanced proofreading of legal documents, and more.

Asked what percentage of tasks AI tools could perform instead of humans, 26% of lawyers said 10%; 20% said 11%-20%, another 20% said 21%-30%, and only 16% of the lawyers think that AI could replace 41%-50% of lawyering tasks.

5. End of the legal dynasties? What lawyers are telling their kids.

One question that revealed a wide gap among respondents was, "Would you recommend your children to continue in this profession"? 50.2% said yes, and 49.8% said they would not recommend it.

Those who would recommend their children to follow in their footsteps said that legal advocacy was a diverse, challenging, fascinating, dynamic job, offering an understanding of all industrial sectors, and that it provided an excellent foundation for any other area. "It puts you at the heart of commercial development in Israel," one respondent noted. Other respondents noted that the legal profession was a social mission, enabling change, helping society's weak, and providing a professional challenge. "The profession deals with people, events, processes, and has affects what happens."

The economic aspect was also listed among the profession's advantages. Some see it as a long-term profession, unlike high-tech, believe that it is still prestigious, and say that those who are good at what they do will also succeed financially.

Lawyers who would not recommend their children go into law said it was a Sisyphean, debilitating job, demanding long hours at work, stress, frustration, and an unhealthy work-life balance. These lawyers also note that the profession does not compensate monetarily relative to the investment in time it requires. "Advancement is appallingly slow," "Murderous hours, no life, no reward," "Old world salaries, not new world ones" - were just some of the answers received.

The lawyers also noted a lack of respect from employers, with interns coping with low wages and contemptuous attitudes. Others noted the decline in the profession's prestige and despaired for its future. "The profession is losing its charm," one noted. Others said that law was an outdated profession not suited to the younger generation, and that it would be irrelevant in the future.

Methodology

The "Israel's Best Law Firms" ranking for 2022 is based on a "peers survey" among lawyers working in law firms in Israel in 29 different areas of law. We also surveyed clients, chiefly company in-house lawyers.

Some 6,069 lawyers and 767 clients were invited to participate in the survey, out of the approximately 70,000 lawyers registered at the Israel Bar Association. The sample was put together through research by Statista using websites and other publicly available sources. The invitations were sent by e-mail with a personal link usable once only.

In addition, legal experts were able to participate in the survey by registering themselves. In these instances, the participants had to provide verification of their details by giving a personal e-mail address at a company, and only then were their recommendations included. The link for registration was published and was available on the "Globes" website ( Call for Entries: Globes ranks Israel's Best Law Firms).

The survey was carried out via the Internet between July 20 and October 14, 2021. Altogether, 2,438 people participated in it.

The participants were asked to choose the areas of law in which they specialized (such as labor and employment, white collar crime, insurance, and so on).

Peers were asked to name up to five law firms that they would recommend in the event that they were unable to accept a client (because of a conflict of interests, considerations of capability, specialization in a different legal field, etc.).

Clients were asked to name five law firms that they would recommend on the basis of their professional experience. For each recommendation they were able to add their reasons. The participants'' recommendations and the final list of firms were carefully checked. Lawyers' recommendations for the firms in which they themselves worked were not included in the analysis.

In addition, respondents were given an opportunity to answer general questions about the legal profession in Israel.

The leaders' list

The 100 best law firms in Israel were identified on the basis of the number of recommendations each received. The firms are sorted alphabetically. Each of these law firms received an above average number of recommendations. The list also shows if law firms were especially recommended within a specific field of law. The websites and addresses of these firms are also displayed, on the "Globes" website.

Due disclosure: The "Israel's Best Law Firms 2022" ranking was arrived at through an elaborate process. Nevertheless, it is no indication of the quality of law firms that are not included, and the process is no guarantee of the objectivity of the results.

About Statista

With a database of more than 1 million statistics, Statista is one of the world's leading business data platforms for analyzing strategic markets, statistics, and providing research findings.

Statista.com is a major portal providing access to data, insights and trends on more than 80,000 topics and 170 industries. The portal contains proprietary surveys, exclusive secondary sources, and data from more than 22,500 sources.

Statista was founded in 2007 and is headquartered in Germany. It has more than 1,000 employees in 12 cities worldwide. Statista offers its more than 1.5 million registered users from business, science and the public sector access to high-quality and reliable data and statistics, in accordance with scientific standards.

Statista's Research & Analysis Department conducts analyses and research for its customers.

Statista's customers include multinational corporations, more than 2,000 universities and technical schools, leading consultancy and management companies, advertising agencies, trade organizations, banks and financial institutions, political NGOs and many others. Partners to its projects in the media and communications include The Financial Times, Forbes, The Independent, El Mundo, Frankfurter Allgemeine, Business Insider, and LinkedIn.

Published by Globes, Israel business news - en.globes.co.il - on March 3, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.