When a senior Freshfields partner is spotted in Riyadh, you can be sure he’s not there to top up his tan. The Middle East rumour mill has never ground so fast. Small wonder: every week The Lawyer reports on yet another firm trying to penetrate the Gulf region. The big boys are all trying their luck in Saudi, while the next tier down with interests in the region – DWS, Herbert Smith, Norton Rose, Lovells, Simmons – are racking up the recruiters’ fees with brace after brace of laterals.
The current rush by both UK and US firms to set up in the Gulf states is reminiscent of the landgrab in Germany at the beginning of the decade. Then, too, there were spectacular misjudgements and shockingly ill-informed hires, with many firms assuming that a serviced office in Frankfurt was some magical key to the entire European continent.
In similar fashion, firms’ approaches so far have typically been to use the United Arab Emirates as a hub for the entire region. Dozens of firms have opened in Dubai in the last couple of years. But you’d be hard-pressed to find a nuanced strategic vision of how their practices are going to spread over the entire Middle East.
It’s worth listening to the old stagers such as DWS, Norton Rose and Trowers. All profoundly disagree with the hub strategy – and with some justification.
Opening in Dubai and assuming you’ll get work from the entire Gulf region is wildly idealistic. It’s rather like those US firms that opened in Frankfurt hoping they’d pick up Italian work into the bargain; the cultural naivete is breathtaking. The Middle East jurisdictions require different approaches (not least because some require firms to employ local nationals) and conveniently yield different work: crudely speaking, oil projects in Abu Dhabi, gas projects in Qatar, investment funds from Bahrain and pretty much everything from Dubai. But Dubai, precisely because the barriers to entry are lower, is now dangerously overlawyered.
But back to that Freshfields sighting in Saudi. It’s testing out what A&O and Clifford Chance have both identified as rich pickings in the kingdom, but everything hinges on getting the right association with a local firm. That is a difficult road; but then, magic circle firms are used to being in it for the long haul.