Rumours of potential job losses in the Gulf have been doing the rounds since the New Year, but the revelation that Trowers & Hamlins was the first firm to take the plunge came as a surprise for a number of reasons.
Firstly, unlike some firms which have been scrambling for a piece of the action in the Middle East, Trowers is a well established player in the region. It has been doing business in the Gulf for about 40 years, opening its first regional office – in Muscat – in 1980.
Although it now has 150 staff in the region, which makes it as large as any other global firm operating in the Gulf, expansion has been organic and, crucially in this part of the world, based upon cultivating long-term relationships with its clients.
Secondly, unlike the magic circle, Trowers is not particularly exposed to high-end corporate or structured finance work, which are the major victims of the Dubai downturn. The firm’s unique selling point has been more its project-financed energy and infrastructure practice, which is reliant on deals with longer terms and a more diverse pool of funders.
Thirdly, Trowers has five offices across the region plus an association in Riyadh. That kind of spread allows a firm to reassign lawyers more easily from quieter to busier jurisdictions, which should have allowed it to avoid making any cuts.
Finally, Trowers has historically taken a more conservative approach to reducing headcount than some of its peers. As reported today on TheLawyer.com (see story), it has only just launched a redundancy consultation in the UK, several months after many of its competitors did the same.
These cuts are further evidence that in this recession no corner of the world and no business is immune.