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Israel's' Legal Outsourcing Hub: An Untapped Pool of Talented Attorneys from Around the World

September 18, 2018

There's no doubt that the legal industry is undergoing a revolution. Legal theorists and commentators are lauding the change, the breath of fresh air sweeping across the profession and forcing traditional, conservative law firms to change their work methods. One of the transformations is the increasing use of legal outsourcing by law firms, mostly in the United States and the United Kingdom. [1]

 

According to a report prepared in 2017 by Thomson Reuters, Georgetown Law Centre for the Study of the Legal Profession and the University of Oxford Said Business School [2], Legal Outsourcing is a growing market share with momentous implications for the entire industry. The study reports that the legal outsourcing market share currently stands at $ 8.4 billion ($) per year. Legal Outsourcing service-providers are dynamic actors and are expected to become some of the major players on the field in the coming years.

 

According to data collected in the study, the use of legal outsourcing services is already very common today, with 60% of the legal departments of commercial companies using legal outsourcing services in some way, inter alia, for due diligence in mergers, document review, compliance and regulation. An additional 14% are expected, according to their testimony, to begin making use of legal service providers in the near future.

 

Legal Outsourcing is a win-win-win situation for all three sides of the transaction - benefiting the law firm or the legal department, the Alternative Legal Service Provider (ALSP), and the freelance lawyer. It is the answer to an increasingly worrying problem. Law firms around the world are facing time constraints and workloads which vary and create peaks of overwork, spurts of volume that they need an extra pair of hands to handle. Couple that with clients' increasing demands for cheaper and faster products and you have the post-2007-slump defined. These law firms are in constant need of turning to cost-effective solutions. At the same time, you have more and more lawyers who are looking for flexible alternatives to escape the 9AM to 5PM (mostly it is 9AM to 9PM) grind. 

 

The answer comes in the form of ALSPs who "hook up" law firms and lawyers who chose to work as freelancers. Instead of interviewing an endless list of applicants, hiring staff and then letting them go because the peak of work has ended (or not letting them go, and getting stuck with non-effective staff members), legal outsourcing allows law firms to take on freelance lawyers to adapt the size of the workforce to their needs, saving costs but not losing out on quality. 

 

ALSPs offer a variety of services. From expert legal opinions, to  legal research, legal writing (e.g. preparing motions, appellate briefs, trial briefs, legal memoranda, complaints, pleadings, responses etc.), contract management, document review (e.g. drafting standard contracts, creating and managing databases and repositories, contract reviewing as per standard position and map deviations, analysing contracts for specific compliance or other requirements etc.), litigation support and paralegal services.

 

Another huge asset they can provide is instant pop-up E-Discovery teams. This is one of the fastest-growing and in-demand fields. [3] By working together with technological platforms like Relativity, it is possible to have within a minute's call an armada of lawyers reviewing documents either from your location, or remotely - from the lawyers’ home.

 

The benefits of legal outsourcing are numerous. Firstly, is the ability to maximize efficient time management by outsourcing the less significant tasks and concentrating completely on the more important tasks. There is also the issue of cutting costs. With no overhead and lawyers willing to work for slightly less in order to work the way they want, it's possible to roll back the savings to the client and increase their satisfaction. Extremely important is not only the direct cost-saving but the indirect value of being able to take on large-scale projects because you have the personnel on hand. All these means that firms today are utilising Legal Outsourcing more and more.

 

Another obvious trend is the incorporation of technology into the legal profession. The use of innovative, modern technology in law firms echoes what is happening in the wider business economy. The emergence of these new technologies, processes and automation has brought exciting change and vast consumer and business benefit but also a new modern work structure, and shaping one where temporary positions are prevalent, freelance work is the norm and organisations contract with individuals on a short-term basis. Of course, that doesn't mean that the legal profession will disappear tomorrow morning, replaced completely by computers. But there is likely to be a prolonged intermediate stage that will last a few decades, where legal outsourcing will be the default work method and managed review will be done alongside technology.

 

Freelance lawyers who make the leap to independence look for flexibility and the ability to decide when and how it is convenient for them to work. It allows them to pursue their other passions, hobbies or family life. They are also able to decide what work or project suits them – rather than having to take on all from their employers with no room to ask question or refuse.

 

Many of todays' younger lawyers are Millennials who were born during the technological revolution and grew up playing on the internet more than they played with their Lego sets. This command of technology has translated into a desire for a flexible and dynamic workplace. When most work can be done from your kitchen table, why should you be chained to a desk in a fluorescent-lighted office cubicle? The millennial mind-set, quite correctly, is that embracing technological progress in the workplace should enable them to have a better work/life balance.

 

Study after study reveals that Millennials seek engaging and fulfilling work early on in their careers. [4] They aren't blinded or tempted by the promise of future status or higher pay. According to a 2010 Pew Research Center analysis, only 15 percent of Millennials consider a high-paying career to be one of the most important things in their lives. [5] Similarly, a 2014 Clark University Poll found that 78 percent of young people believe “it is more important to enjoy their work than to make a lot of money.” For previous generations, "work-life balance" was considered an issue for women wanting to harmonize between their careers and child-rearing. But for millennials, "work-life balance" – or "work-life blend" is a generational concern. Young lawyers—men and women alike—are unwilling to accept a deal that effects their quality of life. The traditional model of a lawyer in Big Law simply won't hold water with them, and law firms are feeling the burnt of it. In short, Millennials seek connection, meaning, and fulfilment in their chosen careers.

 

The change is already apparent. Many of the "Magic Circle" and other leading firms have already introduced flexible working hours. A&O led the way in 2015 when they introduced their iFlex program, even becoming finalists in the American Express Best Flexible Working Initiative Award, [6] and Herbert Smith following shortly after with their one home-working day per week. [7] Mishcon de Reya’s impressively high retention rate can perhaps be explained by the trust they put in their employees. The firm is known to be one of the most flexible in terms of working arrangements.

 

Legal Outsourcing confers on firms the ability to ADAPT and be quick on their feet, by providing an immediate solution. Instead of paying staff for hidden unemployment, law firms can utilise Legal Outsourcing to expand their team when an urgent, large-scale project comes in – all of a sudden increasing the workflow. If the law firm needs a lawyer fluent in a foreign language or qualified in a foreign jurisdiction, a freelance lawyer can come in and provide assistance, no-strings-attached. Like a lot of things in today's modern society, we need legal services to be accessible, immediate, efficient and cost-effective – to the client and to the law firm.

 

Of course, there are also downsides to legal Outsourcing. The major one cited by law firms is communication and cultural barriers. That is just one reason why Israel is the perfect hub for legal outsourcing. Not only are there native lawyers proficient in English and with a similar cultural orientation, but every year new lawyers emigrate to Israel from around the world.

 

Israel has a proven track-record regarding its law firms. Amongst Israel's' largest firms are names such as Goldfarb Seligman & Co Law Offices who work with Google, IDB Group, and Intel, Herzog Fox & Neeman who work with Facebook, HSBC, Microsoft, and Meitar Liquornik Geva Leshem Tal who count among their clients Amdocs, Citibank and more.

 

Some Israeli law firms are gradually opening international branches outside of Israel. Since August 2012 (change of legislation), over 60 international law firms have established a presence of some sort in Israel; some settled for a temporary desk managed by a partner who travels to Israel every few weeks. Others went further with a representative permanently present and available. Greenberg Traurig already set up a fully-functioning office, while Yingke, a premier Chinese firm, has merged with the Israeli law firm EKZN. So that there is no doubt that Israel is a lawyer-savvy nation.

 

The Israeli Bar Association has 73,726 advocates registered as members as of August 2015. [8] Israel ranks first in the world in number of lawyers and 43rd in the number of judges, relative to the country's population. This overrunning of the market means that salaries for the average lawyer in Israel are quite low compared to their colleagues abroad. The average Israeli lawyer is paid about a fourth of what his American counterpart is. Combine that with English-speaking skills (Ethnologue, an annual reference publication that provides statistics on the languages of the world, lists English as widespread in Israel and states that 85% of the Israeli Population are fluent in English) [9] and it is possible to find an abundance of cost-effective talent.

 

Alongside native Israel's are a large number of immigrants. While some Jews emigrate to Israel looking for economic prosperity in a more Westernized society, others are drawn by fervent love for Israel, its people and its culture. They give up a convenient life in the land they grew up in, in order to come to Israel – a country in which they have never lived but which they have always called home. According to the Israeli Central Bureau of Statistics 11,500 new immigrants came to Israel in 2017. Of these, no less than 525 were lawyers and accountants. [10]

 

Utilizing lawyers in Israel allows foreign law firms access to top lawyers who were trained in their jurisdictions but are now living overseas, while billing them at a much lower rate.

 

All this means that Israel houses a fleet of professional, experienced lawyers – qualified in a variety of jurisdictions, with knowledge in an assortment of legal fields, and fluent in a number of languages. Lawyers who previously worked for premier law firms in Europe or in the United States, are available at the much more cost-effective Israeli price standard. An additional advantage is that experienced lawyers taken on to do even basic tasks like Due Diligence, Document Review and E-Discovery – just get the job done faster and better.

 

To conclude, the legal arena is rapidly changing, to a point where alternative legal service providers are key players working alongside legal departments and law firms. It is not only the specialised expertise which are the reason for law firms and legal departments to use alternative legal service providers, but also technology, effective and efficient processes and saving costs.

Notes: 

 

[1] Lacity, M. C., & Willcocks, L. P. (2013). Legal process outsourcing: the provider landscape. Strategic Outsourcing: An International Journal, 6(2), 167-183.

[2] Thomson Reuters, Georgetown Law Center for the Study of the Legal Profession and the University of Oxford Said Business School. (2017). The 2017 Alternative Legal Service Study. URL: https://legalsolutions.thomsonreuters.com/law-products/solutions/legal-outsourcing-services/outsourcing-insights/alternative-legal-service-provider-study-2017   

[3] Global Market Insights. (2017). Industry Report on Legal Process Outsourcing (LPO) Market Size By Service and Location, Growth Potential, Price Trends, Competitive Market Share & Forecast. URL: https://www.gminsights.com/industry-analysis/legal-process-outsourcing-lpo-market-size 

[4] Huyler, D. D., Ding, W., Norelus, A., & Pierre, Y. (2015). Millennials in the Workplace.

[5] Fry, R. (2015). Millennials surpass Gen Xers as the largest generation in the US labor force. fact tank: News in the numbers. Pew Research Center.

[6] Jacobs,K. (2015). Top Employers for Working Families special award winners announced. HR Magazine. URL: http://www.hrmagazine.co.uk/article-details/top-employers-for-working-families-special-award-winners-announced 

[7] Harris, J. (2015).  Herbert Smith Freehills makes agile working permanent after positive feedback. The Lawyer. URL: https://www.thelawyer.com/issues/online-august-2015/herbert-smith-freehills-makes-agile-working-permanent-after-positive-feedback/

[8] Israeli Bar Association Statistics. 

[9] Ethnologue. URL: https://www.ethnologue.com/country/IL

[10] Israeli Ministry of Aliyah and Integration Statistics. URL: http://www.moia.gov.il/Hebrew/InformationAndAdvertising/Statistics/Pages/ImmigrationToIsraelCurrentYear.aspx

 

About the Author: 

 

Adv. Lee Goldberg Zaidman is the COO of LawFlex. Lee is responsible for all aspects of management and development of LawFlex in Israel and overseas, including enhancing the service provided to clients, managing the pool of lawyers and handling operations with law firms and business entities in order to, among other things, promote and establish the status of LawFlex as market leader in the Legal Resourcing field.

 

Lee believes that the success of the company lies in the quality of its members, and approaches every process with a desire and belief in achieving a tailor-made solution fitted perfectly to our customers and their needs.

Lee joined LawFlex after an eight-year stay in London, England. Whilst in London, she worked at the law firm Berwin Leighton Paisner, where she dealt, among other things, with financial risk regulation and hedge funding. Lee completed her L.L.,M. cum laude at the University College London. In conjunction with her studies, Lee worked as a research assistant to the Director of the University of Oxford Centre for Competition Law and Policy.

Lee also holds a bachelor's degree in Law and Business Administration (specializing in Marketing) from the Interdisciplinary Center Herzliya.

 

 

 

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