Special report: Qatar
10 December 2012 | By James Swift
15 August 2013
17 November 2013
16 December 2013
19 June 2013
18 March 2013
Qatar is preparing to host the 2022 World Cup and legal work is on the rise
“The pace of activity has picked up since the summer ended and it feels like a marathon is about to start,” says Eversheds’ Middle East chairman Chris Jobson on the mood among firms in Qatar. “More people are jogging on the spot - advisers, consultants, contractors - but has the race started? No. When will it start is the $10bn question.”
Not everyone agrees. Several partners at international law firms in Doha claim the race is firmly on, but as Qatar gears up for the 2022 FIFA World Cup, law firms are still manoeuvring to take advantage of the promised avalanche of projects and fringe work.
In 2011 a glut of firms - K&L Gates, legacy Herbert Smith (now Herbert Smith Freehills), McGrigors and Clifford Chance - opened offices in Doha. So far in 2012, only construction specialist Fenwick Elliott has come out as being interested in opening in Qatar (see box).
But the rumour mill continues to turn, with a number of firms said to be scoping out the jurisdiction.
Ashurst is one player mentioned by sources on the ground in Doha as a prospective entrant. If all goes well, Ashurst will open in Saudi Arabia with a Jeddah office in January.
The firm’s Middle East managing partner Joss Dare says: “We’ve just ventured into Saudi so our focus is on bedding that in. A Qatar office is something we keep under review, but no more than that at this stage. If we decide the business case is there for our kind of offering and we find the right people, of course we’ll consider it.”
Meanwhile, Trowers & Hamlins - which was one of the first UK firms to expand into the Middle East - has said that it looked at opening in Doha a few years ago but decided against it.
“The QFC [Qatar Financial Centre] licensing process and the cost of commercial real estate there made the market expensive to enter, and some research we undertook indicated that very few international firms were actually making any money in Qatar,” says Trowers’ Abu Dhabi and Dubai managing partner Abdullah Mutawi. “Also, because the legal services market - and the culture of using legal services among many Qatari corporations - was pretty nascent and unsophisticated at that time, many firms were ploughing money into Doha offices only to find that they could not secure the revenue to cover costs.
“The view I took at the time was that the only way to enter the market would be to open a small representative office focusing on construction work and using the base to generate work in other areas and develop the practice from that. I’d still favour opening a construction-oriented practice in Qatar.”
The price of loyalty
Indeed, while planning work, M&A and litigation is on the up in Qatar in light of the 2022 World Cup and the state’s plans to hike the standard of living by 2030, partners at international firms who have been in Doha for a long time warn that firms moving into the city expecting a gravy train to just stop at their office doors may be in for a shock.
“The streets aren’t entirely paved with gold,” says one partner at an international firm. “There’s a lot of potential work that just hasn’t got through. I think law firms are getting frustrated.
“Some major competitors have been pricing themselves incredibly low on deals to establish relationships with clients, but that doesn’t work,” the partner concludes. “There’s no real loyalty unless you’ve been here for years.”
Qatar in the legal news
7 September 2012:
Construction specialist Fenwick Elliott’s senior partner told The Lawyer the Aldwych-based firm was looking to open in Doha in an attempt to get more day-to-day work in the region - the firm’s first overseas office.
“With most clients, unless you’re on the ground you won’t get the day-to-day work,” said Simon Tolson. “So we want to stick people out there - a couple of our partners and hire a couple of local lawyers - and have five or six based there. But we’ll also have people flying out regularly.”
19 July 2012:
Latham & Watkins and White & Case locked horns on one of Qatar’s largest-ever dollar-denominated Islamic bond issues. The $4bn sukuk was split into two tranches that sold at record-low yields of 2.1 per cent and 3.24 per cent.
White & Case advised the State of Qatar on English law aspects of the two-part issuance. Latham took several roles, advising the joint lead arrangers, the state on the Qatari law aspects and Deutsche Bank on its role as delegate.
3 July 2012:
Qatar Rail launched its inaugural panel, appointing seven firms. Fifteen pitched, but only Allen & Overy, Al Tamimi, Clifford Chance, K&L Gates, SNR Denton, Mubarak Al Sulaiti and White & Case won spots.
GDP (US$, 2011): 173bn
Annual inflation (October 2012): 2.7%
Population (2011): 1,870,000
Life expectancy at birth: 78
Unemployment rate (2011): 0.5%
Source: World Bank, Qatar Statistical Authority