Chance of a sturdier Saudi solution

Last week Paris firm August & Debouzy quit its six-year alliance with Nabarro, a move that leaves the London firm rather stranded in France.

Catrin Griffiths

At the launch of the European alliance in 2008 then-senior partner Simon Johnston told us, “It’s a model that’s worked for Slaughter and May and we don’t see why it won’t work for us.” A cute quote, but unfortunately a year later the Spanish alliance firm Rodes y Sala quit the alliance to merge with Gomez-Acebo & Pombo. Not quite the Slaughters model, then – although, of course, even blue-chip firms have to deal with shifting loyalties among best friends; as our report in 2012 unearthed, Slaughter and May’s best friend Jun He is as likely to work with Freshfields and Clifford Chance

Six years is a serious investment in a relationship. Nabarro and August & Debouzy shared a considerable amount of practice information and spent a long time fashioning their business development around their combined offering. Seasoned market observers will automatically assume one thing: Nabarro’s not-terribly-covert merger hunt is hotting up and August & Debouzy wants out. In the meantime, Nabarro will have to fill its French gap fast.

How to negotiate the volatility of relationships in local markets: this has been an abiding issue for internationally-minded law firms for decades. It becomes even more acute in jurisdictions such as Saudi Arabia, where the pickings are potentially so rich. Our detailed report on the state of play in Riyadh highlights the difficulties Western firms have endured (Cover story, page 12). Fasken Martineau’s relationship with Osool Law Firm ended in some acrimony last year, while Herbert Smith Freehills lost its Saudi associated firm Al-Ghazzawi and hence its foothold in the kingdom. Linklaters poached Allen & Overy’s association with Abdulaziz AlGasim Law Firm, which had been put up for renewal after five years. DLA Piper has had no fewer than three associations with local firms.

This is why Clifford Chance’s move is potentially a game-changer. In January it transferred the two-partner transactional practice of its co-operation firm Al-Jadaan to a new professional partnership model, which allows up to 75 per cent of a law firm in Saudi to be owned by a foreign person or organisation. Clifford Chance is now no longer entirely reliant on one named Saudi lawyer to sponsor its presence. It’s an elegant solution and, for Western law firms, one that is long overdue.