An aerial view of downtown Tel Aviv, Israel.
An aerial view of downtown Tel Aviv, Israel. (duha127/iStock)

Not even Israel is immune to market consolidation for legal services.

This week, one of Israel’s largest law firms picked up a seven-lawyer technology boutique in Tel Aviv as the country’s vaunted Iron Dome missile defense system intercepted rockets fired from Gaza.

Lior Aviram, a senior partner and member of the management committee at Shibolet & Co., where he heads the 135-lawyer full-service firm’s high-tech and venture capital practice, said that his firm will bring on two partners and five associates by absorbing Israeli, Ben-Zvi, Attorneys at Law.

The high-tech transactional boutique founded by Omer Ben-Zvi, who specializes in venture capital financing, joint ventures and IP matters, will move into Shibolet’s Tel Aviv office next month. The latter firm has about 110 lawyers in Israel’s financial capital, Aviram says, with another 25 in New York and one in Shanghai. (Ben-Zvi had a bar mitzvah for his son Thursday and was unavailable for immediate comment.)

The merger comes amid heavy fighting between Israel and Hamas, as the death toll from the latest conflict in Gaza surpassed 800. On Thursday, the U.S. and Europe resumed flights to Tel Aviv that had been canceled earlier in the week after a Hamas rocket slipped past the Iron Dome’s shield and destroyed a home a mile from Ben Gurion Airport.

“On a day-to-day basis things are fine, although you might have to duck into a shelter for a few minutes here and there,” Aviram says in a phone interview from Tel Aviv. “Of course, while most of us are trying to work as usual, certainly our hearts and minds are elsewhere.”

Despite the unrest, Israel’s economy has soared in recent years following the breakup of some key conglomerates and a booming technology sector, which The Am Law Daily noted last year was leading to an increase in cross-border transactional work for both Israeli and Am Law 100 firms.

In February, Skadden, Arps, Slate, Meagher & Flom, White & Case and two leading Israeli firms advised Lumenis—a medical laser system maker based in Yokneam, a small city in northern Israel known as the country’s “startup village”—on a $75 million initial public offering that an SEC filing shows generated $1.4 million in legal fees. In December, Kirkland & Ellis counseled Yokneam-based medical technology company Given Imaging on its $860 million sale to Covidien.

The Covidien transaction capped an incredible 2103 for Israeli M&A, as deal volume pushed toward its highest levels since 1994, and mergers involving startups reached $6.45 billion, according to a report by PricewaterhouseCoopers Israel. In the technology sector, Israeli map software company Waze tapped Gunderson Dettmer Stough Villeneuve Franklin & Hachigian to advise on its $1 billion sale to Google; Goodwin Procter handled the $800 million sale of Israeli fraud protection software firm Trusteer to IBM; and O’Melveny & Myers counseled Israeli cellphone network equipment maker Intucell on its $475 million sale to Cisco Systems.

Other notable deals in the Israeli tech space last year include Apple’s $360 million acquisition of 3-D motion sensor company PrimeSense, Facebook’s $200 million buy of mobile app analytics firm Onavo and the purchase by Seattle-based F5 Network of security startup Versafe for an undisclosed sum in response to IBM’s big buy of competitor Trusteer, which, along with the Waze sale, was among the 10 largest Israeli tech deals of all time.

Taking the lead on the F5/Versafe deal was Israeli, Ben-Zvi, the firm being absorbed by Shibolet. Shibolet is no stranger to acquisitions. Last year, it became one of Israel’s 10 largest firms by taking on four partners and 12 associates from J. Zaltzman, Gilat, Knoller, Graus, Salomon & Co. Aviram says that Shibolet already handles legal work for large companies like Huawei, Nokia, SAP and Siemens. By bringing on Ben-Zvi’s firm, which last year also advised on the $127 million IPO of Israeli website builder Wix, Shibolet now expects to advise additional tech and venture capital firms.

“The world is growing, and companies want that one-stop shop for legal services,” says Aviram, noting that his firm frequently partners up with U.S. firms on cross-border deals. “And Israel is no exception.”

Israel’s growing economy—even some of the country’s famous kibbutz collectives have gone capitalist—has peaked the interest of some Am Law 100 firms.

The Am Law Daily reported in late 2011 on Greenberg Traurig becoming the first major U.S. firm to open an office in Tel Aviv, and fellow global legal giant DLA Piper has also mulled a presence in the country. The New York Law Journal, a sibling publication, reported last year on how Israel’s relaxation of rules on foreign attorneys had allowed other firms like New York’s Zeichner Ellman & Krause to set up shop outside Tel Aviv in Ramat Gan.

Shibolet maintains relationships with several large U.S. firms—Duane Morris has sought to cooperate with the firm in the past—but Aviram isn’t worried about American lawyers moving in on his territory. While Greenberg Traurig’s Tel Aviv office does Israeli legal work, Aviram says most foreign firms have representative offices that are geared more to client relations than competing with local firms.

There’s also the issue of billing rates. Most large Israeli companies expect to pay a fraction of the high-end legal fees sought by most Am Law 100 firms. Aviram says large Israeli firms like Shibolet often perform other nonlegal services, such as business advice, to their local clients, whose executive management ranks are not as robust as those of their U.S. counterparts. Aviram also busies himself with making sure that the perpetually tenuous geopolitical situation around Israel doesn’t interfere with his firm’s business.

“Technology is the engine of Israel’s economy, so we have to try and maintain normal service to clients, even if that’s not always possible,” Aviram says. “If we miss something on an IPO, that will hurt us more than any rocket.”