“We’ve heard the talk – but we’ve yet to see the action.” So says one veteran member of Dubai’s expat legal community in response to reports in The Lawyer last week of the start of a scramble on the part of UK law firms wanting to open up shop in the key financial centre of the United Arab Emirates (UAE). The alleged frenzy is being fuelled by an energy and property boom, plus the growth of the Dubai International Financial Centre (DIFC).
“It’s not clear to me to what extent people are actually bringing real execution capability, or whether they’re just building shop windows for work based in London,” comments Robin Abraham, a partner based in Clifford Chance’s Dubai office. “If you have three or four lawyers on the ground, you can do a lot of marketing, but you can’t do a lot of big transaction work.” Clifford Chance has 30 lawyers based on the eighteenth floor of the Dubai World Trade Centre, where it has been for more than 30 years. “The reality is that, largely, our counterparties on transactions are based in London,” he adds.
Anthony Garrod, a Dubai-based partner at Clyde & Co, strikes a similarly sceptical note. It just becomes “a toe in the water” exercise unless there are the people on the ground to do the work effectively, the lawyer reckons. Clydes has been in Dubai for 20 years, where it has around 40 lawyers. Garrod is far from convinced about the assertion by new entrants that their new practices are being driven mainly by projects work. “How many projects are there?” he asks. The market for the newcomers, he reckons, has to be “pretty limited”.
Ashurst, DLA Piper Rudnick Gray Cary, plus US outfit Akin Gump Strauss Hauer & Feld are all in the process of opening offices in the financial centre. Berwin Leighton Paisner and Linklaters are also interested, while Freshfields Bruckhaus Deringer launched a small local presence in May. So is the new interest anything more substantive than law firm marketing? “We see Dubai as the next logical step for our ETI [energy, transport and infrastructure] business,” comments Geoffrey Picton-Turbervill, who heads up Ashurst’s global energy team. “International energy is probably our biggest growth area, and the Middle East is probably the biggest area for that work. We’ve done a lot of work there for the last five to seven years and having people on the ground was the next logical step.” Ashurst will open its office officially in September, although Dubai managing partner Paul de Cordova has already relocated from London after the firm’s licence application was approved earlier this year.
Simmons & Simmons made the move last month. The firm has had an Abu Dhabi office for 12 years and opened an office in Doha, Qatar, in September 2003. The new office complements the two older offices, says Simmons Dubai resident partner Robert Leigh. “We see the Gulf as an expanding area in economic terms and we want to be part of that,” he explains. “There’s a large number of big projects going on both in Dubai and in other parts of the Gulf, and it’s a natural place to resource them and to try and get involved in those larger ones.”
Away from the debatable attraction of projects work, the prospect of the DIFC appears to be genuinely exciting to new and established lawyers alike, and in particular the opening of the Dubai International Financial Exchange (DIFX), the regional stock exchange, in September. “It’s the first exchange in the UEA, which I think is a credible market in terms of its rules and regulations and the way it does business,” observes one UK lawyer based in Dubai. “There have been masses of IPOs on the local market which, frankly, we haven’t touched.”
“Of all the jewels on Dubai’s crown, the DIFX is currently the most gleaming,” reckons Garrod at Clydes. He reports that his office is already advising on seven IPOs, despite the fact that the doors of the new exchange have yet to open. Graeme Muir, head of Norton Rose’s Dubai office, is similarly optimistic. The firm set up in Dubai in September 2003 with four lawyers and now has 15 professional staff with two trainees. “I believe this exchange will take off,” he says. The solicitor admits to “a slight bias”, as he sits on the DIFC’s regulation committee. “If it can work anywhere in the Middle East, I think that it’s going to work here,” he adds.
Clifford Chance is relocating from the World Trade Centre to an office in the new DIFC development, which overlooks the new trading floor. The firm was involved in setting up the centre and, for example, drew up the legislation that established the Dubai Financial Services Authority and the regulatory regime for licensing participants in the DIFC. “It does create great opportunities and we’re hoping it will create a regional hub for capital markets, and so issuers have a place where they can undertake a regional offering to a standard we would expect of companies in London, for example,” comments Scott Campbell, a lawyer in Clifford Chance’s Dubai office.