DLA restructuring to dramatically scale back Gulf presence
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DLA Piper is to cut a further nine per cent of its Middle East-based staff as part of a restructuring that will see its total regional headcount drop by 39 per cent.
The firm announced today that as of this month seventeen jobs would go from its network of Gulf offices, including seven lawyers and 10 support staff.
In addition to this 14 members of staff will be relocated back to the UK, while a number will also relocate to the firm’s Australian alliance partner DLA Phillips Fox. A further 11 members of staff have resigned.
When these factors are combined with two earlier rounds of redundancies it results in a year-on-year headcount drop of 39 per cent.
A spokesperson for the firm said that the fact that some employees would be heading over to the Australian firm was “an indication of how well the two businesses work together”.
Abdul Aziz Al-Yaqout, DLA Piper’s regional managing partner for the Middle East, said: “In response to materially changed conditions in the UAE and wider Middle East markets, DLA Piper announces a reorganisation of its Middle East practice for 2010.
“The firm will expand further its restructuring capability to meet corporate and banking client demands while simultaneously addressing the excess capacity in its construction, real estate, project finance and development projects teams.
“The impact of redundancies on our people is deeply regretted and we’re assisting them to manage the transition, whether remaining in the region or returning to their home locations.”
This comes shortly after news of a request by the Dubai government for a debt standstill and a restructuring of the wholly-owned government entity Dubai World (26 November 2009). Property development business Nakheel, which has been a major client of DLA Piper in the region, is particularly affected since part of the debt includes a $3.5bn (£2.1bn) bond Nakheel issued, redeemable on 14 December.
The latest developments at DLA Piper follow two rounds of job cuts earlier this year, which led to allegations of favouritism on the grounds of national origin (20 July 2009).
DLA Piper launched in the Middle East with a Dubai office in 2006, expanding rapidly to open offices in Abu Dhabi, Doha, Kuwait City, Muscat and Riyadh, recruiting from Australia, the UK, the New Zealand and the Gulf itself.
Readers' comments (10)
Anonymous | 8-Dec-2009 8:44 am
The DLA Debacle Continues...
It is clear that the DLA business model here did not work despite multiple warnings from individuals who had been in the region for years. You simply cannot bring in a bunch of outsiders, who have contempt for everything local here, who don't have any clients, who don't have any local expertise and expect any type of success.
GREAT JOB DAVID CHURCH & CREW
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Sandy Dunes | 8-Dec-2009 11:54 am
DLA Middle East lost its way after Oliver Agha's departure. They should have tried harder to keep such an acknowledged expert in Islamic finance. DLA would be leadng the Dubai World financial restructuring if Agha had remained at DLA.
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Anonymous | 8-Dec-2009 2:07 pm
Not very surprising and not totally unexpected. DLA remains to be one of the largest firms by headcount in the Middle East with multiple offices across the GCC. With work from Nakheel drying up, it is a good move to relocate people to other offices. I think DLA has attracted a lot of press bashing when other firms went through similar but unreported problems. 2010 is set to be a busy year in the UAE and it is good DLA have addressed this issue now and not later.
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Anonymous | 8-Dec-2009 4:15 pm
DLA's assertion that they're assisting redundant staff to "manage" their transition makes me smile - they refuse to pay the statutory minimum in severance settlements (including repatriation costs) and are taking advantage of vulnerable people (many of whom have families).
The ME practice is in a state of collapse - there's been no work for practically a year, there are rumors of licenses being revoked and the firm is seeking to sub-lease much of its UAE office space. Their situation will come as no surprise to anyone who has dealt with the ME practice .
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Anonymous | 9-Dec-2009 10:36 am
What happened to the Chambers article about DLA? Will someone tell me please where to find it. I heard it was censored.
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Broomhead | 9-Dec-2009 10:56 am
Measured over a full year, the headcount reduction well exceeds 39%. DLA claimed a headcount of 120 lawyers in late 2008/early 2009. What is the headcount today (excluding redundancies and resignations currently in notice period)?
There is no link between the Australian and Middle East practices (if DLA’s current Middle East activities could be described as a ‘practice’). DLA is straining to provide cover for those partners who are being shipped off to Australia.
Anonymous @ 4:15 is right that DLA is avoiding payment of minimum statutory settlements. This is just part of the story. The ‘sabbatical’ program that DLA glorified as a creative measure to save jobs was nothing more than a calculated scheme to defer redundancy costs by sending juniors off to far flung places like East Timor for 6 months to volunteer, for a pitiful AED 10,000/month (non volunteer ‘study’ sabbaticals were remunerated at AED 6,000/month). Some of these juniors were made redundant their first day back to the UAE offices from ‘sabbatical.’ Others were made redundant by phone, while overseas.
Anonymous @ 2:07 must be a member of that endangered species known as the DLA Piper Middle East employee. The whining about being singled out unfairly by the press is recognisable, and so many Lawyer, Legal Week and Chambers articles ago. Spare the sobbing for when you are made redundant. For now know that DLA in the Middle East is in the news because of an unjustifiable hiring spree, inexcusable ignorance of the Middle East market, indefensible maltreatment of employees, and incredibly poor internal and external communications.
Rumours are rife about a DLA legal practise license withdrawal. High praise to the authorities who have done well to clear the rubbish from the legal market. Good riddance!
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Anonymous | 10-Dec-2009 2:10 am
Broomhead makes some excellent comments - DLA has sought to take advantage of inherent uncertainties in UAE labour law and has treated staff utterly appallingly, and to be blunt has ripped them off - I wouldn't be surprised that if DLA soon receives a series of unfair dismissal claims - at least that would give the remaining lawyers something to do.
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Anonymous | 11-Dec-2009 1:48 am
DLA's downfall is inevitable - they recruited a load of third rate lawyers (especially at partner level) to produce substandard work for a client that is now insolvent who, "in the good times", never paid its bills anyway!!!! Have David Church and Co ever heard the expression "never put your eggs in one basket"!!!!
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Ex-DLAer | 15-Dec-2009 6:28 am
Don't worry, DLA are not changing their tune this time! I was made redundant earlier this year and had to fight to get even my contractual entitlements. I knnow some people who have been part of the redundancies this time around and the theme is much the same - HR being very difficult, refusing to offer even what is contractually compulsory - they particularly are doing this with the support staff.
The new region head seems like an honest person, and has a good vision for the future, however his first port of call really should be to ensure that the people who are leaving now leave happy and well compensated, as DLA is unlikely to recover from another round of bad press. And no DLA, "compensation" does not mean your notice period and gratuity. That is called an "entitlement".
I am so glad that I dont work there any more.
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Anonymous | 18-Dec-2009 6:16 am
when DLA started their office in Dubai everybody wanted to be part of it - including myself. After the disastrous results people are happy they havent left their jobs for what seemed to be a better opportunity. Fortunately for current DLA i hear great stories about their new RMP, he seems to be knowing where the weaknesses are, and business is picking up.
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