Now that Israel has opened up its legal sector to foreign attorneys, some New York firms have plunged into a process they hope will bring more Israeli business.
Until recently, there was no law permitting foreign attorneys to advise Israeli clients in the country. As part of new regulations finalized last year, Israel now allows foreign attorneys and firms, after they complete a lengthy application process, to advise clients in Israel on matters relating to foreign laws. Foreign attorneys cannot advise clients on Israeli law.
Zeichner Ellman & Krause (ZEK), a 52-attorney firm based in New York, said it was among the first to be certified under the change, meaning it can advise Israeli clients on U.S. matters. Last August, the firm opened an office in Ramat Gan, outside Tel Aviv, for business development purposes.
Daniel Rubel, formerly a New York associate, became managing attorney of ZEK’s Israel office when he relocated last year.
Rubel, like other foreign lawyers submitting an application, had to take an ethics exam to be certified. He said the test "wasn’t too challenging" as Israeli legal ethics are similar to those in the United States.
ZEK submitted two applications: one for itself and one for Rubel. Applications ask for a list of all firm partners, proof the firm has Israeli malpractice insurance, and proof the attorney is in good standing and has passed a criminal background check, among other information, Rubel said.
Overall, Israel appears to be taking the certification process very seriously, he said.
"They’re doing extensive background checks. They’re definitely making sure the lawyers who practice here are fully qualified," he said.
ZEK’s total cost for the enterprise was about $5,500, including setting up insurance, becoming certified and registering the firm’s foreign branch with Israeli authorities, Rubel said.
ZEK’s Israeli clients include technology firm Magic Software Enterprises and some banks with U.S. branches, said New York partner Stuart Krause.
With its new status in the country, the firm is aiming to expand business in litigation, arbitration, general business contracts, anti-money laundering work and SEC matters, Krause said.
"We hope to develop substantial Israeli business," he said. "This is our way of proclaiming to the potential client base, we are in Israel, we have made a commitment."
Krause said ZEK has already received business referrals from Israeli law firms. The advantage of being certified as a foreign attorney, stopping short of getting an Israeli law license, is to continue to receive referrals from local law firms that would not see a foreign firm as competition, he said.
DLA Piper and Greenberg Traurig said their lawyers also have begun the certification process.
Although Greenberg Traurig’s Tel Aviv office opened just last year, firm attorneys have been making frequent trips to Israel in the past decade, said Gary Epstein, managing shareholder of the Tel Aviv office and chair of the firm’s corporate and securities practice.
With four attorneys in Israel, Greenberg sees opportunity in health care and medical device matters, technology, intellectual property, corporate and energy work, he said. The firm’s Israeli practice has represented clients such as Teva Pharmaceutical Industries, Elad Group, Fortissimo Capital Fund and Lumenis.
Local billing rates are about half what they are in New York, topping out at $300 to $400 an hour, said Epstein.
"The addition of the ability to do work on the ground in Tel Aviv upon certification will, we think, enable us to provide greater services to Israeli clients," he said. "It’s easier to meet face-to-face, it’s local rates."
But Epstein said he believed the changes in regulation will not have a "major impact" on firm business.
"We think that having an office in Israel will give us an advantage over foreign competitors or U.S. competitors who don’t have a presence there. We think it will add incrementally to our practice. We don’t think it’s going to be a sea change in the short term," he said.
For Baruch Bebchick, a solo practitioner who moved from New York to Israel about six years ago, the change in the law "opens up a whole new universe of potential clients" for his practice, he said, noting the number of startups in Israel and the cross-over business between the United States and Israel.
Bebchick, also among the first to be certified in Israel, works remotely on matters while representing New York clients in general business and transactional matters.
He said he anticipates his practice representing U.S. clients to remain his "bread and butter."
"But now at least I don’t have to turn away Israeli clients, something I have often had to do in the past," he said.
Bebchick said Israel’s current certification process "is overly rigorous" and the Israel Bar Association is charging foreign lawyers an annual licensing fee equivalent to about $800. He said that is "significantly more" than what U.S. jurisdictions charge Israeli or other foreign consultants in the United States.
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