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With the growing global importance of Islamic finance, the Middle East is emerging as a vital legal hub, offering an ideal opportunity for lawyers looking to make names for themselves in this flourishing practice area.
The Middle East is an exciting place for law firms to become established. With large-scale investment banks and a fast-paced projects and infrastructure sector, it is no wonder jurisdictions in this region are considered to be booming in the global economy. While the Western world has been struggling with the turmoil of the credit crunch, the Middle East has been relatively untouched by market volatility due to its thriving economy.
Dubai has for some time been considered the hot spot of the Middle East, with its thriving capital market and world-renowned stock exchange, the DIFX. Magic circle firms such as Allen & Overy (A&O) and Clifford Chance have had presences in Dubai since the 1970s, when oil and gas were a vital part of the economy.
Dubai is extremely important to us as a firm. says Julian Johansen, head of A&Os Saudi Arabian office. Weve channelled a lot of energy into our teams here and regard Dubai as a centre for us. Dubai has indeed been the origin of some big deals you may be familiar with. A&O and Denton Wilde Sapte both bagged plum roles on the high-profile takeover of ports operator P&O by Dubais DP World. A&O also played a part in the first-ever dual listing of a sukuk (a sharia-compliant bond) on the Dubai and London stock exchanges.
Dubais thriving and you can see it developing every day, says Johansen. There are some innovative deals coming out of Dubai its very exciting. It is these types of deal that has brought Ashurst and Herbert Smith to the region in recent months and keeps old-timers such as Norton Rose on the ground for good.
You would be forgiven for believing the Middle East is all about Dubai. This perception is understandable considering it is the jurisdiction we read about most in the financial pages. But law firms have offices in other parts of the region and take them just as seriously. Norton Rose has four partners based in Bahrain, which is again a hot spot for infrastructure and energy work. Abu Dhabi and Qatar also offer a lot of work to corporate and finance practices, with more banks launching offices in these jurisdictions each year. Until the Qatar Financial Centre (QFC) and the QFC Regulatory Authority (QFCRA) were established in Qatar, foreign firms had to form local partnerships with their controlling stakes residing in those firms in order to be able to set up there.
By acquiring a licence from the QFC, firms such as Clyde & Co, Eversheds and Simmons & Simmons all have their own offices in Qatar, focusing on a wide range of practice areas.
One Simmons partner based in Qatar, Andrew Wingfield, says: Capital markets have exploded in Qatar, like the rest of the Middle East, and the trend doesnt show any sign of stopping. This is why law firms are including Qatar in their strategies. Last year (28 May 2007) The Lawyer reported on the launch of the QFCs Civil and Commercial Court, which will encourage many more firms and businesses to launch in the jurisdiction due to the legal framework it provides for international businesses. With more than 50 international businesses already set up in the jurisdiction, it is easy to see that we should be taking Qatar seriously and viewing it as a strong rival to neighbouring Dubai. An area that is becoming increasingly important for law firms seeking to succeed in the Middle East is Saudi Arabia. While firms must form partnerships with local firms to set up on the ground, UK and US firms are viewing Saudi as another hot spot. Its extremely important to find the right partnership in Saudi. It has to be beneficial to both parties and the culture of the firms have to fit well with each other, says A&Os Johansen.
Last year (4 June 2007) The Lawyer reported on Trowers & Hamlins new association with local Saudi firm Hassan Mahassni. The launch of this partnership, and A&Os new association with Riyadh-based firm Abdulaziz AlGasim, are two of the very few associations in operation.
Interest in Saudi Arabia has heated up as more UK firms have launched associations, bolstering significantly their Middle East capabilities. Last June Dentons announced its association with local firm Wael Abdulrahman Alissa before Norton Rose followed suit, launching a partnership with Abdulaziz Al Assaf in December.
Baker & McKenzie and Clifford Chance also have established offices in the kingdom, taking advantage of the lucrative project-based work on offer. We took our time when we decided we wanted to set up in Saudi, says Johansen. You cant just set up with a firm you have to consider the wider implications and how well the association will serve each group.
It is definitely a challenge for law firms to set up in the Middle East, but it seems to be extremely rewarding for the high numbers of partners and associates who work there.
A key trend in the finance arena at the moment is Islamic finance, and while London is fast becoming a hot spot for sharia-compliant instruments, there is no better place to be than Dubai. All the key UK and US firms based in Dubai have tried to ramp up their capabilities in this area to attract key local and international clients, from banks to corporates.
If Islamic finance is your thing, then the Middle East could be for you. Partners and associates with skill and knowledge in this area are hot property and are very much in demand in this part of the world.
Farmida Bi, a partner who recently joined Norton Rose from Dentons, says: Theres a limited number of people who are really strong at Islamic finance. All the law firms in Dubai are trying to get the best and thats why weve seen so much movement. Last May an entire Islamic finance team launched Lovells Dubai Islamic finance practice, headed by Rahail Ali. Ali and his team joined from Dentons, leaving that firm with no capability in this area. Being an expert in Islamic finance certainly pays off in Dubai and the other jurisdictions in the Middle East, so moving out to Dubai may be something for you finance bods to consider. Apart from the constant sunshine and excellent shopping, Dubai and the rest of the Middle East have plenty to offer lawyers in terms of variety and experience.
Exploring this part of the world is exciting for law firms and the lawyers they employ, providing them with experience in project-based and capital markets law.