Norton Rose Fulbright fights to avoid Dubai crisis as mass Fulbright exit beckons

Leaders at Norton Rose Fulbright are battling to avert a potential crisis in a large chunk of its Dubai operation that could lead to the entire legacy Fulbright & Jaworski arm in the emirate quitting to join a rival.

Dubai

Senior figures at the combined firm – understood to include UK LLP deputy managing partner Tim Marsden and global co-chair Stephen Parish – have been travelling to the Middle East in recent weeks to hold talks with the team in a bid to persuade them to stay.

It is understood the firm is at risk of losing its full team in the firm’s Festival City base, which consists of eight former Fulbright partners, with at least the majority of them understood to be in advanced talks with a leading US firm about a bulk move.

The concern among the team is understood to relate to their unwillingness to join the merged Norton Rose Fulbright firm, which launched under the new name earlier this month.

A source close to the Festival City team said: “There are a number of people in the locations where there is overlap [and both legacy firms had offices] who are not happy about the Norton Rose situation. There has been a lot of time expended with people jumping on planes to shore things up.”

The legacy firms’ Dubai practices were originally set to merge fully into the same profit pool, with Norton Rose’s London management considering different options ahead of the combination including offloading the UK firm’s office in the region to the legacy Fulbright US LLP.

However, protests from the Fulbright side are understood to be the prompt for the firms to go back on this suggestion, opting instead to keep the two arms separate in their original partnerships within the overall Swiss Verein.

This resulted in Norton Rose Fulbright operating in two distinct offices and LLPs in Dubai, with the UK-headquartered firm working out of the Dubai International Financial Centre and the US-based business occupying space in Festival City in a separate part of the emirate.

Legacy Fulbright’s offering is strongest in disputes, while Norton Rose’s practice is more full-service covering areas such as corporate, disputes and banking more evenly.

Part of the cause of the tension is the gap in profitability of the two LLPs, with Fulbright’s average profit per partner in 2012 standing at $780,000 (£502,000), according to The American Lawyer, while Norton Rose’s global average profit per partner (PEP) in 2011/12 was estimated at £420,000. The UK LLP’s PEP figure is also understood be lower than Fulbright’s.

Meanwhile, Norton Rose has also seen a number of exits from its Middle East bases in recent years, with four partners in banking, corporate and projects in Abu Dhabi and Dubai quitting for US firms in 2011 (8 August 2011) and Bahrain shrinking (9 July 2012).

Separately, it has emerged that the majority of Fulbright’s nine pre-merger London partners did not join Norton Rose Fulbright’s UK LLP in contrast to the original plan for the two offices to merge into one LLP based in Norton Rose’s offices.

Instead, the UK LLP’s formal list of members shows that five disputes partners – Lista Cannon, Melanie Ryan, Chris Warren-Smith, Jehan-Philippe Wood and competition specialist Rod Lambert – have remained in the US LLP, keeping them out of the UK firm’s remuneration system.

However, disputes partners Deborah Ruff and Antony Corsi and projects and infrastructure partner Andrew Hart did join the UK LLP when the union launched on 3 June, according to the list. A further partner, arbitration lawyer David Howell has retired.

Norton Rose Fulbright declined to comment other than to say there had been no emergency meetings relating to Dubai. No partners in the Dubai office have handed in their resignation.