With new launches seemingly taking place every month, it has created a fevered recruitment market for partners with local experience.
Herbert Smith and Lovells, the latest City arrivals, launched this year with Norton Rose finance and corporate partners Nadim Khan and Zubair Mir, and Islamic finance partner Rahail Ali respectively at the helm.
Herbies will take a floor of the coveted Dubai International Financial Centre (DIFC) office space in September. Khan predicts that by then the
Other practices to launch in
Linklaters — arguably the most eye-catching of the new launches — hit the ground running after it poached Clifford Chance’s (CC’s) former local head of corporate, Ewan Cameron, for its launch. It now has four partners and 19 fee earners and is still actively hiring.
Luma Saqqaf, Linklaters' head of Islamic finance for the Middle East, comments: “One of the main reasons for opening in
Ashurst, meanwhile, which has to date maintained a lower profile than expected given its UK private equity and finance strength, recently recruited a third partner from Norton Rose when it hired corporate partner Tahir Ahmed in February, its fourth local partner.
Some argue that Freshfields, despite securing several high profile corporate mandates for client Dubai International Capital (DIC) in
Nonetheless the firm already has 23 lawyers and two corporate partners — Bruce Embley and Joseph Huse —working full-time in its DIFC office.
The early success of the DIFC, which is attracting business with its Western-style regulatory environment, zero tax-rate on profits and no restrictions on foreign exchange or repatriation of capital, goes a long way to explaining the confidence behind the market.
Many of the big investment banks, including UBS, JP Morgan, Merrill Lynch, Morgan Stanley, Goldman Sachs and Lehman Brothers, are all now housed in the glass and steel frame and many have recently expanded their numbers.
Linklaters Dubai projects partner Jonathan Inman comments: “The DIFC is working because it has created a platform from which to do business. The entry requirements are straightforward and transparent and all the necessary infrastructure is in place.”
It is unsurprising that a raft of law firms, including Freshfields, Linklaters, CC, Norton Rose and offshore firms Maples and Calder and Walkers, have set up in the free-trade zone and will soon see Herbies and Allen & Overy (A&O) join their ranks.
Tahir Jawed, the head of Maples’
While the DIFC looks to be a success story — a second office block within the zone is still being built and the procedure rules of its own court are currently being finalised — it is nonetheless still regarded by many as an experiment that has yet to prove its lasting worth.
Sadiq Jafar, managing partner of
Meanwhile, the swelling staff numbers within the
One magic circle partner comments: “There has been a change of attitude and an identity shift in the
Mandates such as Freshfields’ instruction by DIC on its £1.03bn sale of the Tussauds Group to private equity group Blackstone are cited as evidence of the benefits of a presence on the ground. Linklaters advised DIC on the acquisition in 2005.
Early arrivals such as Akin Gump Strauss Hauer & Feld, which came to the region with little fanfare in 2005, are starting to play catch-up. The
Unsurprisingly, aside from a substantial local presence, the other pre-requisite for success in
CC Islamic finance specialist Qudeer Latif comments: “Clients are shifting their teams from Europe to
Herbies’ Khan says: “This is a maturing market in which international law firms looking to build an enduring client base need to offer a similar breadth of capability to their teams in Europe and the
This recent expansion has put pressure on
A&O corporate partner Pervez Akhtar, who transferred from
CC, which has likewise been in the region for more than 30 years, last year transferred
While the presence of so many new arrivals has undoubtedly brought more competitive pressure, the consensus is that, in a market that still values personal contact, a solid track record still allows long-established firms to punch above their weight.
One magic circle partner comments that firms that would not regularly appear for bluechip clients or the leading banks in
However, there is no question that established firms are now rushing to institutionalise their local clients rather than building practices around a few personalities who could walk out the door.
One firm that will be hoping that long-term commitment counts for something will be Norton Rose, which has suffered the brunt of much predatory recruitment over the last 12 months. The firm, which has lost all of its four original partners since its 2003
Global head of finance Stephen Parish is bullish, saying: “In addition to internal promotions, transfers from
As the market matures, different points of view are emerging as to whether the
One magic circle partner comments: “Banks are coming in to
Certainly, clients in the region are becoming more demanding as they are exposed to competition between law firms. Jafar says: “Clients are also increasing their levels of sophistication and are more disposed to engage legal expertise.”
As many start-ups in
The close geographical proximity of
Within the last three months the oil-rich emirate has relaxed its legislation to make it easier for foreign law firms to set up without a local sponsor and is developing its own financial centre as it moves to compete with
A few firms, including Dentons, Trowers & Hamlins and Simmons, currently have a presence in the region.
Dentons head of energy Sean Korney says: “In
With resources stretched, capital-poor businesses like law firms may find that launching in a competing neighbouring emirate looks like financial suicide.
Dentons Dubai managing partner Neil Cuthbert says: “The challenge is to make it profitable, so we run
Firms are also looking to neighbouring
Clyde recently joined Eversheds, Simmons and
However, the jurisdiction casting a long shadow over all of these regions is
Cuthbert says: “Saudi is bigger than all the other regions and looking to spend $60bn (£30bn) over the next few years. You can do a lot of work from here but need to be there to understand what is going on in the market.”
Firms already on the ground include CC — which has enjoyed a prized 10-year tie-up with Al-Jadaan Law Firm — Baker & McKenzie, and White & Case, which is currently in talks to attempt to save its alliance with Saudi partner Mohammed Al-Sheikh. And while Freshfields has played down talk of a formal joint venture with Salah Al-Hejailan, it too has moved to tighten up its referral relationship with the Saudi practice.
Saudi lawyers are currently the hottest property in the Gulf — and they know it. One partner at a magic circle firm says: “Saudi is an untapped market; the challenge is in getting local counsel to give due attention to your work.”
Saudi is already allowing some liberalisation in the banking sector, has relaxed the need for foreign banks to set up joint ventures with a Saudi bank and is introducing tax breaks that encourage foreign institutions to set up locally.
Latif comments: “In Saudi in 2001 there were eight licensed banks; in 2007 there are 14. Last year was the first time Saudi licensed foreign banks to open without a local partner and many are looking at opening there.”
One issue that foreign law firms must wrestle with is the difficulty of finding lawyers with the necessary specialist legal and language skills willing to work in the country. As one of the strictest Muslim countries in the region, Saudi has traditionally proved an unpopular choice for law firms.
Freshfields is tackling the problem by hiring Saudi lawyers who have worked outside the region and wish to return, taking them on initially in the
However, other firms, including Norton Rose, are working hard to put together teams to launch a local presence.
Despite the great interest in
Linklaters looked carefully at the Middle East before choosing a base in
Another partner says: “How many people will be keen to uproot their family and bring them to a region without the infrastructure to support them?”
The success of
