DLA Piper, Middle East spread

DLA Piper is now firmly ensconced in the Middle East with offices in six locations acrossthe region, but has it spread itself too thin? Luke McLeod-Roberts reports

David Church

David Church

It is fitting that the man DLA Piper has vested with overall responsibility for its Middle East operation – David Church – should have shot from regional obscurity to global standing in a ­relatively short space of time. For no other firm is as upwardly mobile as DLA Piper. As one recruiter says: “They started off as an average Joe and through a tripartite merger shot to prominence. It’s a real rags to ­riches story.”

Like DLA Piper, Church’s roots are not in the City. He began his career at a host of high-street firms in Essex. From there he went on to join Jaques & Lewis, which was taken over by Eversheds in 1995.

Church worked as a competition partner in Eversheds’ Brussels office until 1998, when he moved over to the then Brussels office of Dibb ­Lupton Alsop, the UK legacy firm of DLA Piper. He had a period as ­international strategy partner in the UK at the time of the transatlantic merger that created DLA Piper and at the beginning of 2006 was sent to the Middle East to become regional managing partner.

DLA Piper’s Middle East practice gets tongues wagging. One source with knowledge of the firm caustically describes his experience of ­dealing with the Middle East ­operation as “like having a really ­dysfunctional girlfriend”.

Although some are critical of DLA Piper as a corporate entity, Church is seen in a particularly positive light.

One source with a longstanding relationship with the firm says: “DLA Piper has a bit of a reputation for being spiky, but David hasn’t come across that way at all.”

Recruiters respect the way he has picked up local knowledge in a short space of time, demonstrating a long-term commitment to the Middle East region. One says: “David is more locally plugged in than some other players. He’s very well liked.”

But Church’s (and DLA Piper’s) experience in the Gulf has not all been a bed of roses. The firm has been criticised as being overly ­political. Last October it lost its ­global Islamic finance head Oliver Agha, who left with a team of associates. Hard feelings abounded.

DLA Piper has struggled to get the Saudi formula right, having gone through three local sponsors in the space of about six months. And the arrival of the global recession in Dubai has not left the firm untouched: it recently slashed eight per cent of its Dubai lawyers.

But this is all in the context of impressive growth levels and some unique ventures outside the ­commercial sphere, which set DLA Piper apart from its regional ­competitors.

Rags to riches

Church set up DLA Piper’s current offering in the Middle East in ­January 2006, with three lateral hires into its new Dubai office. They were partner Chris Sioufi, from ­Unicorn Investment Bank in Bahrain, ­corporate partner Jayshree Gupta from Denton Wilde Sapte and TMT partner Matt Glynn from Linklaters.

All of them, except Sioufi, who left DLA Piper after just a year, are now in senior roles at the firm. Glynn is one of six regional practice group heads. Gupta, who articulated links between India and the Gulf for DLA Piper, is now the principal India partner for the whole firm. And Church has upped his profile as head of a key region with a hotline straight to joint-chief executive Nigel Knowles.

Having begun with niche offerings, DLA Piper’s Middle East presence morphed into a mini-version of what the firm does elsewhere in the world:  heavily-lawyered, full-service, mid-market work with immense ­geographical spread.

To get to where it is now, DLA Piper bulked up with Australian hires in particular. Of note were Peter Monk from Minter Ellison and Damian McNair from Mallesons Stephen Jacques, who both ­developed credible practices.

Additional Australian real estate lawyers were comparatively cheap and gave DLA Piper a relative ­advantage in the context of a new property strata law modelled on ­Australian legislation.

DLA Piper built up strong ­practices in litigation (led by disputes partner Tom Canning) and TMT, while additional offices opened up in Abu Dhabi, Doha, Kuwait City, ­Muscat and Riyadh. Revenues tripled in three years, total lawyers grew to 160 and total staff to 270, making it one of the biggest, if not the biggest, firm in the Middle East.

Downturn, downfall?

But once the downturn came, the firm found itself exposed. The real estate and projects practice suffered from the shelving of construction and commercial property work in Dubai.

Given that DLA Piper is on its third round of redundancies in the UK, it is not surprising that cuts came to the Gulf too. Eight ­associates (or 8 per cent of the Dubai lawyers) lost their jobs ­recently. Church says he “cannot ­recollect” whether support staff were also affected. A number of others took alternatives including ­sabbaticals, reduced working hours, pay cuts and redeployments to Abu Dhabi.

However, the Middle East head points out that far from adding unwanted overheads, the firm’s regional spread is a good hedging mechanism in the current market.

“GCC [Gulf Cooperation Council] economies differ. The pure real estate practice has changed but it’s not ­inactive,” Church argues. “In Dubai there are a lot of people wanting to restructure developments and a lot of real estate-­related litigation.”

If many firms think that relative proximity means that they can ­service Dubai out of Abu Dhabi or Riyadh and Doha out of Dubai without needing the expense of an office, the ‘flag in every jurisdiction’ model is ­broadly reflective of the strategy DLA Piper operates elsewhere in the world. As one commentator says with respect to the firm’s Middle East practice: “They came, they saw, they expanded.”

This is a strategy DLA Piper is able to carry out in part because it keeps a tight rein on its equity. In 2007, ­equity partners made up about 30 per cent of the firm’s partnership, so junior and senior fixed-share partners can run offices more cheaply than those who have ownership of the firm.

Church thinks the firm’s spread wins it brownie points in the market. “We’ve had a lot of credit from clients for having a regional network,” he comments.

But one magic circle regional head is scathing about whether the finances of such a strategy stack up. “Our firm wouldn’t take that approach,” he says. “We want to be solely in places that’ll generate the level of profitability for transactions that we expect. We wouldn’t look at Qatar or Oman. Only in Riyadh or Dubai does profit get up towards what we would expect in London.”

Sponsorship worries

But the relentless pursuit of growth leads to questions about how thorough DLA Piper’s due diligence is. Foreign firms cannot do business in Saudi Arabia without a local sponsor. When DLA Piper’s alliance with the Law Office of Abdulaziz Al-Fahad  fell apart last June, the firm quickly rushed its legal director and Saudi national Abdulaziz Al-Bosaily into Riyadh. Expectations at the time were that Islamic finance head Agha would move to Riyadh shortly ­afterwards.

But following Agha’s departure  after less than two years at DLA Piper, that dream fell apart. By the end of the year the alliance with Al-Fahad had also disintegrated.

DLA Piper then brought onboard somebody unknown to some of the best lawyers in Riyadh – a Dr Alaa Naji – to run the show. Church argues it is an alliance that will stand the test of time.

So why the upheaval? Is it a blind pursuit of growth above all else?

An unresponsive management ­structure? Church thinks that any problems are the natural consequence of the firm’s exponential growth.

“I don’t think we’re any more or less political than any other organisation,” he says. “I don’t see it as being a major issue. We’ve developed very quickly. We have 36 nationalities and it’s been an exciting challenge.”

Teething problems aside, DLA Piper has made excellent strides on corporate social responsibility and on engaging with Arab stakeholders that set it aside from the other firms in the region. It is in the unique ­position of having a dedicated ­regional manager for corporate social responsibility and Arab initiatives, former regional recruitment head Wafa Tarnowska.

“She’s a woman with vision,” says one contact who knows Tarnowska well. “DLA Piper envisions the ­Middle East map changing. Instead of expats we’ll see more and more local lawyers. There are very few firms that have that vision. I’ve never seen another firm do it to the same extent.”

Church agrees that his offices are just following what DLA Piper has done elsewhere. “Globally, the vast majority of our partners are ­nationals in the country in which they operate,” he says. “We believe it’s the right objective for the Gulf too.”

DLA Piper’s Gulf ambition may have led it to make some rash ­choices, but ultimately it has ­managed to pick itself up quickly and keep going.

Education:1968-71: Law, University College London
1971-72: College of Law
Work history: 1972-75: Articles with Gotelee & Goldsmith, Essex
1975-82: Assistant and then ­partner, Bawtree & Sons, Essex
1982-88: Partner, ­Brussels and Essex, Ellison & Co
1988-92: Partner, ­Brussels and Essex, Wollastons & Co
1992-98: Partner, ­Brussels and London, Jaques & Lewis/Eversheds
1998-present: Partner, Brussels/London/Middle East, DLA Piper

Favourite thing about doing business in the Middle East:The dynamic Gulf ­business ­environment.
Favourite spot to unwind in Dubai: At home with the family.
Best career achievement: Being part of the ­development of a global law firm – DLA Piper.
What he misses most about the UK: Apart from not seeing enough of the wider family, walks on the sea wall by the River Blackwater.