Middle East: The rise of the Middle East
10 May 2008
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The Middle East has long been a hotbed of legal activity for the world’s most international law firms. For years the status quo was largely that US firms had the monopoly in Saudi Arabia, with energy and projects firm taking the lead, while UK firms dominated in Dubai.
But things are changing, and rapidly. While the UK magic circle and second-tier firms have branched out into Abu Dhabi and Saudi, US firms have started to set up shop in Dubai.
“There has certainly been a shift,” says Ashurst Abu Dhabi managing partner David Wadham. “Since 2005, when Linklaters took a group of Clifford Chance lawyers from its Dubai office, we’ve seen UK firms hire aggressively in the market and set up in more jurisdictions in the region.”
Allen & Overy recently stepped up a gear by launching an association with local Saudi firm Abdulaziz AlGasim in Riyadh. Office head, partner Julian Johansen, moved to Riyadh from the Dubai office last year to head its assault on the Saudi market.
The attraction of the Middle East is the energy, infrastructure and now thriving capital markets industries. Now that there are many more US and UK firms occupying the region, competition is tight and firms have to maintain a clear strategy to win and maintain clients.
White & Case, which has had an office in Riyadh for 30 years, recently launched an office in Abu Dhabi, with partner Villiers Terblanche taking the lead. The firm’s strategy in Riyadh was well thought out – although more UK
firms are looking to Saudi to strengthen their Middle Eastern offerings.
The firm’s association partner, Mohammed Al Sheikh, trained as a White & Case lawyer in New York with the intention of a return to Saudi to head its office.
In Saudi, White & Case is now synonymous with petrochemical giant, Saudi Aramco. Just as the firm’s former London finance stars Maurice Allen and Mike Goetz aggressively pursued Deutsche Bank to make it a global client, Al Sheikh pursued Saudi Aramco and succeeded in the capturing the lion’s share of work.
Now, White & Case’s Middle Eastern offices are supported mainly by London. The prevalence of English law governing transactions in the Middle East has meant White & Case UK continues to be crucial to the firm’s success in the region.
For White & Case, drawing on its transatlantic strength is what counts for its Middle Eastern offering. With a high number of secondees and junior lawyers being posted in the region from the UK, the Middle East is certainly an important piece of the jigsaw.
In contrast, for UK firms in the region the level of secondments and the number of associates and partners sent to beef up Middle Eastern operations varies. “The more established firms don’t need to have any secondees in the region,” says Ashurst’sWadham.
“But for those firms that launched recently it’s more important. For us, we want to make sure we’re instilling the same culture of the firm in our new offices.”
Latham & Watkins stunned the legal market earlier this year when it revealed its plans to launch three Middle Eastern offices simultaneously. The firm now has an on-the-ground presence in Abu Dhabi, Dubai and Qatar. Latham partner Rindala Beydoun is the managing partner of all three offices.
Latham has had strong ties in the Middle East for some time. Sovereign wealth fund Qatar Investment Authority (QIA) played a large part in the firm’s motivation for launching. QIA has instructed Latham for years but the relationship was strengthened when London-based partner Andrew Longmate went inhouse with the group to become general counsel.
Gibson Dunn & Crutcher also converted a longstanding relationship, with Investcorp, into a new Middle East office when it launched in Dubai late last year. Clifford Chance, which snared a lead role on the DP World deal in 2006, may have lost some lawyers to Linklaters, but there is no denying its success in Dubai. The firm has primarily leveraged off its banking and finance expertise in London, as well as global clients such as Citigroup, as the lynchpin for growth.
Overall, while many of the elite UK and US firms have a significant presence in the Middle East, it is still the US that lags behind the UK. The likes of Clifford Chance and Linklaters have built a serious offering in the Middle East, but Wall St rivals such as Davis Polk & Wardwell and Simpson Thacher & Bartlett simply do not have the same presence. “It’s not as crucial to the way they work,” argues one magic circle partner. “UK firms have the monopoly on capital markets in the region. The New York elite just hasn’t focused there.”
While there are many US firms with a strong presence in the Middle East, UK firms have placed more emphasis on the region in recent years. As a result, they have been able to better dominate the lucrative and continually growing market.