Currency Turbulence Reaches Law Firms: "At the Dollar Rate, Two or Three Months of Life Disappear"

Despite the rise in the dollar rate in recent days, its sharp decline in recent months to below 3 shekels continues to worry not only exporters or high-tech companies, but also one of the service circles most closely tied to the global industry, the large law firms. This is especially true of firms that work on a large scale with technology and high-tech companies, investment funds and foreign clients, and that represent clients in mergers and acquisitions and international litigation. Pricing in these areas is usually in dollars, while their expenses are mostly in shekels, so they are directly feeling the roughly 20% drop in the dollar against the shekel over the past year. The result is direct erosion in revenue and a need for pricing adjustments and financial hedges. "Because of the large volume of activity of law offices with international clients who pay in dollars, we are like exporters in every sense, and we too are feeling the erosion of the dollar very clearly. It is something everyone in the industry is talking about, especially firms whose activity is geared toward the high-tech sector," several participants in a panel moderated by the writer of these lines at the Israel Bar Association conference last week agreed.

In conversations that Calcalist held with several managing partners at large firms, they described coping with the damage caused by the dollar’s decline, the opportunities that דווקא open up because of it through increased transactions abroad, the need to ask foreign clients to raise rates, and even thoughts of switching to billing in shekels.

Attorney Ra'anan Lerner, senior partner at Meitar, says the damage begins first and foremost in high-tech itself: "Assuming the dollar rate continues at these levels, the disaster is greater than people understand. The high-tech industry is a ticking time bomb with a fuse. Most startups raise money in dollars, while their expenses in Israel are in shekels. At the current dollar rate, two or three months of life disappear, and the problem is that you do not know where the floor is, and it seems there is a lack of attention from the government."

From there, he says, the problem spreads to service providers: "All the industry that deals with high-tech, law firms, accounting firms, etc., lives and breathes and bills in dollars, while expenses are in shekels, so of course this affects all the service providers who will feel the effect, and in the end it shows up on the bottom line. The big problem is the uncertainty at the client, which turns into uncertainty for you."

According to Lerner, firms are looking for solutions. "We are not firing or downsizing, but like any business we are making hedges, though there are limits to that. No hedge will solve the problem that stems from the fact that the lion's share of revenue has fallen by about 20% because of the drop in the dollar."

According to attorney Gil Winkler, managing partner at Fischer (FBC), even when preparing the 2026 budget the firm was already ready for a drop in the dollar rate, "and therefore we made pricing adjustments in advance. Like any economic entity, we operate on several levels, financial protections such as currency hedges, and daily monitoring of rates and updates as needed, to make sure we maintain our profit margin."

Winkler adds that clients understand the situation when it is handled transparently, which also makes it possible to update rates in light of the dollar’s decline. "If for years you act fairly and transparently, then when there are changes, clients accept it properly, and everything is done in cooperation."

What also makes it possible to update rates for foreign clients paying in dollars is the gap compared with the customary fees abroad: "In the U.S. they charge $2,000 an hour, which is several times more than here. In other words, we have room to raise rates for foreign clients because of the decline in the dollar, and there is room to grow."

Attorneys Eran Bazalel and Amit Steinman, managing partners at S. Horowitz, say the ability to raise rates for foreign clients exists, but is limited. "You can raise the rate and still be considered cheap compared with the U.S. On the other hand, you cannot tell the American client: I am raising it to $1,000 an hour. He knows the Israeli market."

The solution, they say, is honest and fair dialogue with clients. "In any case, fee adjustments are made from time to time, and it is clear that such a significant erosion in exchange rates over such a short period is a legitimate reason for such a dialogue, even though the international players do not come out ahead from this volatility, so there is some willingness to help."

According to them, "Just as the housing market once moved from dollar pricing to shekel pricing, our market may slowly undergo such a change too. However, it should be taken into account that foreign clients are less comfortable with shekel pricing or a minimum exchange rate."

Bazalel and Steinman say the strengthening of the shekel against the dollar and the euro should be viewed as a broader managerial event. "This is an event that rests first and foremost on the management elements of a firm, when to realize currency, how to pay suppliers, how to create cash flow with clients, how to set payment dates, how to hedge risks, how to invest and preserve the value of money, and so on. You need to be alert to trends and proactive in finding solutions and applications. In addition, as in our case, it is important that alongside international activity there be a strong anchor in Israel, which provides stability. Therefore we are taking this matter in the necessary proportions."

Attorney Gil White, managing partner at Herzog Fox & Neeman, also says it is not right to examine the strengthening of the shekel as a single parameter. "Some of the effect of the dollar’s decline is offset by an increase in the number of transactions by Israeli companies and in international mergers. In 2024-2025 we reached a peak in transactions, and no decline is visible in 2026," White says, emphasizing the importance of creating a diverse mix of activities and fields in law firms in order to create balance.

"There are firms where high-tech is the main business, and then exposure to dollar effects is higher. Here, alongside international activity, there are many departments that balance things out, so not all revenue depends on foreign currency, the split is about 50-50. It is true that the retainer from international clients is about 20% lower because of the dollar’s decline, but it is still from a high number."

White says that with Israeli clients the firm has already billed in shekels for years, and with foreign clients in foreign currency, and he estimates that at some point in the future the law firm market will move to shekel billing even with foreign clients. "I think that at some stage this will have to be done, just as in Sweden you pay in kronor. No Tel Aviv firm has done this yet, and we have no concrete plans, but these are ideas that come up in the industry from time to time, and I assume the day will come when we will charge everyone in shekels."

In any case, he stresses that currency volatility will not be passed on to employees: "We have no intention of making cuts or harming teams. Whether the dollar reaches 5 shekels or falls to 2.5 shekels, we are a firm that absorbs exchange-rate volatility on our employees."

Similarly, attorney Nimrod Rosenblum, founding partner at ERM, describes a situation in which the firm, which is based on international transactions and feels the drop in the dollar rate, mitigates the impact through diversification among clients and fields, as well as through the deal-making hype. "The local mergers and acquisitions market is boiling, and there are also many transactions with international aspects, so we have a lot of work in fields such as cyber, energy, data centers and AI. It is the busiest market I can remember in several years. Bodies coming into Israel and those going out, companies, funds, institutional investors. The Israeli currency is worth more, so some of them channel it to buy assets abroad. The strength of the shekel is indeed very bad for the Israeli economy, but it creates opportunities for our clients to buy and invest abroad, so we accompany them in those transactions and that creates more work and more income for us, and that offsets the drop in the dollar rate. We would all be happy if the dollar were worth 3.5 shekels, but the hype around deals more or less offsets the fall in the rate."