Middle East General Counsel: Middle men
12 February 2007
The growing ties between Dubai’s and the UK’s legal markets have been strengthened as Middle East companies look west for in-house expertise
For the past few years Dubai has witnessed an explosion in the number of both in-house and private practice lawyers. The economic boom that has seen Middle East countries become serious players on the world stage - thanks largely to their abundance of natural resources, particularly oil and gas - has seen local companies start to invest internationally, while multinational companies have piled in to ply their wares in an emerging market.
The growth has seen the need for legal services increase exponentially and, in turn, has brought with it a demand for a more sophisticated in-house legal counsel.
“For a Western company, an in-house legal function is about risk mitigation,” says Bristol-Myers Squibb Middle East and Turkey legal director Ziad Zarka, a US-trained and qualified, Saudi Arabia-raised lawyer of Syrian ethnicity. “The repercussions of not having a Western-qualified lawyer could cost the company millions.”
It is a common theme and one that is not about to change anytime soon. General counsel of the Middle East Broadcasting Centre John Whitehead says: “The quality of the intellect is the same [between Western and local lawyers]. The quality and the rigour of the training [locally] is just not as good. You’re not going to find good-quality Arab-speaking lawyers out here - you have to cast your net a lot more broadly.”
Lachlan Davidson, who moved to Dubai from Australia to take the position of general counsel at Millennium Finance Corporation, the investment bank arm of Dubai Islamic Bank, says government agencies and powerful family-run companies - the traditional strongholds for local lawyer general counsel - are also starting to change their ways. “They now realise you need competent in-house counsel to deal with the international firms,” he says.
Standard Chartered Bank chose to relocate part of its in-house legal function to help drive forward its operations in the region rather than recruit, with group head of legal David Brimacombe moving to Dubai in mid-2006. Now head of legal and compliance for the Middle East, Pakistan, Africa and Europe, Brimacombe is one of the highest-profile City-based counsel to relocate to the region.
International Power also chose to relocate in-house lawyer Graham Methold to head its Middle East function after David Wadham quit the company to join Ashurst in July 2006.
Indeed, the circle of Western solicitors now heading Middle East-based legal departments is vast. Add to the list Nick Hornung, who joined investment group Istithmar in December 2006 as director and senior legal counsel from Linklaters.
Dubai International Capital (DIC), the private equity house that has been making a number of large investments in London and which narrowly failed in a bid to buy Liverpool FC, has Andrew Wright as vice-president and head of legal. The UK-qualified Wright joined the group from Vinson & Elkins.
Emirates head of legal Alistair Dunn and general counsel of company development Nakheel David Nicholson are working for local companies, while former Olswang partner Simon Copleston is now legal adviser for emerging markets for the Abu Dhabi Investment Authority (ADIA). Nicholson, another Australian who helped Nabarro Nathanson establish its Dubai operation in 1991, has remained in Dubai ever since and now heads a team of nine drawn from across the globe, all with previous international experience.
Recruitment has long been a particular thorny issue for the Middle East, but for the committed it can be a stepping stone to big things.
Millennium’s Davidson, with stints at Minter Ellison in Australia and Linklaters and McDermott Will & Emery in London, is now company secretary and general counsel to a company that last November announced the financing of a $5bn (£2.55bn) fund. A week later it launched a further two funds valued at $1bn (£510.74m) each.
“It’s certainly allowed me to gain a higher position in my career than I could otherwise have had,” says Davidson.
And he is not the only one. Investment group Istithmar’s Hornung was a managing associate at Linklaters, while ADIA’s Coplestone was an associate at Olswang before making the move.
Al Salam Bank general counsel Mohammed Paracha joined in October 2006 from Norton Rose’s Bahrain office, where he was a senior associate and considered the brightest star in the firm’s rated Islamic finance practice.
Mark Anderson, who handles the Dubai-based work for recruiter Laurence Simons, says the influx of Western companies has seen the background of general counsel in the region “almost come a full circle”.
“If you’re a local with a Western education, a Western law firm training, international experience, can speak the language, have the contacts and understand the culture, then you’re at the very top of the tree,” says Anderson. “Unfortunately, there aren’t that many of those people around.”
Paracha is one, Zarka is another. The latter moved to the Middle East from Texas in 2004 as a lifestyle choice to raise his children and joined pharma company Bristol-Myers Squibb in August 2006.
“If you can be sensitive to the culture, speak the language and command the respect that a US or European education and training brings, then you’re standing goes up a few notches here,” he says.
The evolution of the Middle East in-house legal department still has a very Western feel to it. There is money and opportunity, but there is also risk. And wherever there are those three things, there is the need for top-notch in-house counsel.