The number of lawyers in Israel steadily rises year after year. While some are unable to find work in the profession, which lowers its prestige, it nonetheless pays to be an Israeli lawyer, but it depends where. For the first time, Duns & Bradstreet (D&B) Israel has revealed the estimated income of Israel's top law firms.
According to D&B Israel, the average revenue of the top ten law firms was $30 million in 2007, 22% more than the average of $24.5 million in 2006 and triple the figure from ten years earlier. The average revenue of the second tier (ranked 11-20) was $16 million in 2007, and the average revenue in the third tier was $10 million.
D&B Israel said that salaries in these law firms ranged from $100,000-190,000 per year for a junior partner, $190,000-370,000 a year for a senior partner, and $1-1.5 million for each firm's "star" hitters, of which there are usually two or three per firm. Duns & Bradstreet Israel added that a lawyer represents $250,000-300,000 revenue per year, and that partners vacuum up revenue.
D&B Israel estimates the revenue of Israel's largest law firm, Herzog Fox Neeman Law Office, which has 160 lawyers, at $45 million. D&B Israel says, "The firm has 54 partners; junior partners earn at least NIS 40,000 a month. There are few workplaces where a third of the employees earn such levels of pay, not even in high-tech."
A source at the law firm said, "I know of no company with $45 million revenue where one person earns $1 million a year. No one at a company with $15-20 million revenue makes $500,000 a year. This is a very profitable business."
D&B Israel general manager Reuven Kuvent says that high salaries are not only paid at the big law firms. "The big firms, whose core business is commercial law and large contracts, do not actually have the largest revenue in the sector. In many cases, the revenue of niche law firms, such as those operating in tax law, is higher."
D&B Israel states that Israel has 2,600 active law firms, most of which have just one or two attorneys. Only a quarter of law firms have more than five lawyers. Israel's legal sector market totaled NIS 2.2 billion in 2007, up 5% on the NIS 2.1 billion in 2006, and 51% more than the NIS 1.4 billion in 1998.
The primary reason for the booming legal industry is the rise in business by law firms as the thriving economy increases companies' need for legal services, necessitating law firms to hire more attorneys. It has also led to consolidation in the sector as large firms merge to create mega-firms, albeit on an Israeli scale.
Israel's top law firms continued their expansion during 2007, with the five largest firms now numbering more than 100 attorneys each. These firms hired 111 attorneys altogether last year, through both mergers and natural growth. The ten largest law firms hired 175 attorneys altogether last year, boosting their legal staff by 19% over 2006.
Kuvent said that the consolidation in Israel's legal industry is beginning to resemble the trend in the US. "As in the US and Europe, super-firms have been created, which have more than 150 attorneys. For the sake of comparison, the 100 largest US law firms have an average of 800 attorneys, with the largest employing 3,300 attorneys. The reason for the growth is economic prosperity, globalization, and the growth in capital markets in recent years."
Herzog Fox Neeman was Israel's largest law firm, in terms of personnel, in 2007, hiring 21 attorneys, or 15% growth, to 160 attorneys. The number of partners at the firm rose to 54 from 44. Goldfarb, Levy, Eran, Meiri & Co. was in second place, the same as in 2006, with 136 attorneys, after hiring 13 during the year, or 10% growth, while the number of partners rose by 31%.
Gross, Kleinhendler, Hodak, Berkman & Co. rose to third place from sixth place, after 47% growth in the number of attorneys, mostly through its merger with Berkman, Wechsler, Bloom & Co. Gilat, Knoller, Graus & Co. Law Offices & Notary also grew by 47% thanks to its merger with Jozeph Zaltzman and Co. The fourth largest firm is Meitar Liquornik Geva & Leshem Brandwein, which grew by 23%. is in fifth place, after growing by 21%. Published by Globes [online], Israel business news - www.globes-online.com - on February 5, 2008
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