Trowers & Hamlins has merged with its alliance partner in Egypt and further expanded in Cairo with the hire of an office head from Eversheds’ Saudi Arabia sponsor firm.
The merger, which took effect earlier this month, has created a 21-strong outfit called Nour Law Office managed by Trowers & Hamlins. Sara Hinton, a British and Egyptian national who has led Trowers’ Cairo office since it opened in 1999, continues as resident managing partner, while Mohamed Nour is now the firm’s resident senior partner.
Trowers’ Cairo office focuses on non-contentious work on large corporate transactions, including M&A and oil and gas infrastructure, while Nour Law office is known for it dispute resolution practice.
Corporate and banking specialist Hany Kassem joined Trowers’ Cairo office in December 2010 as a partner. He joined from Hani Qurashi law firm in Riyadh – Eversheds’ local sponsor in Saudi Arabia – where he headed the office.
“The merger is the natural next step for our relationship with Mohamed Nour and Nour Law Office,” said Hinton. “We believe that the merger will not only enable us to target new areas of work but will also provide the right combination of talents to enable our continued expansion in what is one of the most exciting legal markets in the region at the present time.”
Clifford Chance is set to open an office in Qatar as the magic circle firm continues to expand its Middle East capabilities.
The office in the Qatar Financial Centre (QFC) will be fronted by finance partner Richard Parris, who is currently based in Dubai, and counsel Greg Englefield. The office, which will open as soon as the firm receives licence approval, will initially consist of around half a dozen lawyers.
Gulf managing partner Graham Lovett told The Lawyer that the office could expand to include, “20 to 25 lawyers over the next three to four years, although we have to start from a realistic level”.
The office will focus inititally on finance, projects and the capital markets, with some scope for corporate work.
Last December’s award of the 2022 World Cup to the Emirate is likely to result in a slew of work, particularly in the infrastructure space.
Parris said: “This decision is a significant step forward for the strategy of the firm and our ability to help our clients with their Qatar-related business opportunities. The subsequent award of the 2022 World Cup to Qatar will hopefully present even further opportunities in this regard.”
Lovett added: “I think there’s a difference emerging between ourselves and our competitors in what we think of the Middle East. We are very bullish about it as a jurisdiction.”
Last year, in a surprise move, Clifford Chance sent M&A rainmaker Guy Norman to Dubai to strengthen its corporate offering in the region.
Firmwide managing partner David Childs said: “The Middle East plays an important role in the firm’s international network. We have a longstanding presence in the region and have continued to make important strategic investments in our capabilities.
It’s clear to us that there is a great deal of dynamism in Qatar and across the region generally and we’re proud to be playing an active role in supporting further development and growth in these increasingly important financial centres.”
The firm’s Dubai office first opened in 1975. It has since set up in Abu Dhabi and entered in a cooperation agreement with Saudi Arabian firm Al-Jadaan and Partners.
Covington & Burling’s Middle East alliance partner Institution Quraysh for Law & Policy (IQ) is set to launch offices in Riyadh and King Abdullah Economic City.
The two new offices, which are expected to open within the next two months, will house around two or three lawyers each and will focus on providing advice on legal and policy infrastructure as well as transactions.
Covington’s International group vice-chair John Veroneau and Middle East co-head Bruce Wilson will both be involved in the new offices and it is expected that lawyers from the US firm will join the new offices at a later stage.
“With our new focus on legal infrastructure and policy work in the Middle East, Malik Dahlan [principal of iQ] is the perfect partner. We’re really excited about the project and we sense a demand in the region for the kind of service we’re offering,” said Wilson.
King Abdullah Economic City is a $26bn project located on Saudi Arabia’s Red Sea coast. The project was revealed by the country’s king, Abdullah bin Abdulaziz Al Saud, in 2005. Along with three other planned economic cities, King Abdullah Economic City is designed to help Saudi Arabia diversify its oil-based economy, attract foreign investment and create jobs.
Covington announced its exclusive alliance with IQ in November 2008. IQ is headquartered in Doha, but also has offices in Jeddah and London.
Simmons & Simmons has formed an alliance with Saudi Arabia firm Hammad Al-Mehdar & Co. The news coincides with six new partners in London as part of Simmons’ 13-strong annual promotions round.
Simmons’ alliance with the three-partner, 15-lawyer, Jeddah-based firm has already gone live and is aimed at complementing the firm’s offices in Abu Dhabi, Doha and Dubai.
According to Simmons’ Middle East head, Tim Field, the alliance will effectively be exclusive. The firm also hopes the alliance further Simmons’ regional focus on energy and infrastructure, financial institutions, life sciences and TMT work.
Hammad also has a small presence in Riyadh, which Simmon’s hopes to be able to develop alongside its alliance partner.
“Hammad Al-Mehdar & Co is a modern, progressive firm and has excellent relationships in the region,” said Field. “We have been working with them for about a year, so this [alliance] is a natural progression. We’re already starting to see the benefits: we have three large projects in the region, in energy, infrastructure and the financial institutions sectors, which we expect to kick off shortly.”
Simmons has also announced its annual round of partner promotions, with 13 associates made up across five jurisdictions.
Six of the new joiners are in London: three in the dispute resolution team, two in employment and one in banking.
Simmons’ German offices received the next highest number of new partners, with two in Düsseldorf and one in Frankfurt. Two partners were made up in Amsterdam, in dispute resolution and real estate. The firm also made up one partner apiece in Dubai and Milan.
Clifford Chance has seconded two senior lawyers to its Saudi partner firm Al Jadaan & Partners, in an attempt to strengthen its relationship with the Riyadh outfit.
Corporate and capital markets lawyer Omar Rashid and Paul Latto, a banking lawyer, have each been appointed co-heads of their respective practices together with Al Jadaan partners.
The lawyers, both counsel, are also joined by four associates from across the network. The magic circle firm and Al-Jadaan now have a total of 24 lawyers working between them in Riyadh.
The move follows regulatory partner Tim Plews’ secondment to Al Jadaan last year.
Plews said Clifford Chance was “very well placed to take advantage of the opportunities in Saudi Arabia as markets develop there over the next few years.”
Al Jadaan managing partner Mohammed Al-Jadaan said: “Our co-operation agreement with Clifford Chance is in its second decade and progressing well. I am delighted to see Clifford Chance increasing its commitment to us and to legal services in Saudi Arabia.
Eversheds has merged with Middle East law consortium KSLG, trebling its size in the region.
Bryan Hughes
The merger, which goes live today (25 May), gifts Eversheds seven new partners and 30 fee-earners, as well as offices in Amman, Baghdad, Dubai and Riyadh. Eversheds already has its own offices in Abu Dhabi and Doha.
All the offices, except Riyadh, will be fully integrated into Eversheds’ LLP, but will be called Eversheds KSLG pending completion of the licensing arrangement.
Riyadh will operate as an associated office, due to regulatory restrictions.
KSLG is a consortium of full-service law firms, comprising: Dhabaan & Partners in Saudi Arabia; Khasawneh & Associates in the UAE; and Sanad Law Group in Jordan and Iraq.
As a result of the merger, Eversheds has called time on its existing alliance with Saudi firm Hani Qurashi Law Firm, which has offices in Jeddah and Riyadh.
According to Eversheds’ Middle East managing partner Christopher Jobson the merger will give the firm a boost across a range of practices, particularly regulatory work and policy reform, as well as a better relationship with in-house counsel across the region.
“We’ve known and worked with these guys for many years, and this has been built up over a significant period of time” said Jobson. “They’re quality lawyers giving quality service in a part of the world where you can’t always guarantee that.
“Clients are saying to us that they need wider coverage in the region. We’re all conscious of the dynamics in the region at the moment, but the Middle East is still a very important legal market and one that we can’t ignore.”
In a statement the firm’s chief executive Bryan Hughes said: “We’ve been looking to establish a region-wide offering for some time and, importantly, with a firm that’s totally aligned to our ambitions and values.
“KSLG’s strong domestic reputation and local knowledge will strengthen Eversheds’ international offering and will create a progressive corporate legal practice in the Middle East with a strong platform for growth.”
With substantial assets being restructured, talk of state capital injections and clients struggling to assess the extent of their exposure, there’s something in the recent crisis in Dubai that is eerily reminiscent of the 2008 global banking crisis.
At the end of last month, on the eve of Dubai’s longest holiday of the year, the emirate’s government announced it would be requesting a six-month debt standstill from creditors to its wholly-owned holding company Dubai World.
In addition to this, some units of the business, including Nakheel and Limitless, will be restructured.
The news sent shockwaves around global markets anxious this could spark a drop into the second V of a possible W-shaped recession.
Denton Wilde Sapte is one of a growing number of firms that have been instructed by Dubai World creditors requesting advice on their positions. The firm’s Dubai managing partner Neil Cuthbert says there was surprise locally rather than panic when the news about Dubai World broke.
“It’s been blown out of all proportion outside of the United Arab Emirates (UAE),” he says. “Everyone here knew there was a mountain of debt – a lot of investments were worth a fraction of what had been paid for. But we didn’t know how it would be resolved. There’s surprise at the way in which it’s been done and the timing, but not that radical steps needed to be taken and taken very quickly.”
To be fair, to equate the collapse of Lehman Brothers and the recent events would be something of a stretch. For a start, the sums of money involved are vastly different. Lehman held £600bn in assets when it filed for bankruptcy, Dubai World has about $26bn (£15.6bn) of debt. Plus Dubai World is still standing and much of it is in a healthy condition – particularly Emirates airline and P&O Ferries. It is assets such as these that are at the centre of the debate over how the saga will eventually be ironed out.
The expectation was that any problems suffered by Dubai would be shouldered by Abu Dhabi – the wealthier, oil-rich jurisdiction that is the centre of the UAE federal government. About 10 months ago the central government injected $10bn into Dubai through its purchase of five-year Dubai bonds. Allen & Overy and Clifford Chance were involved back then and the firms, which are now advising Dubai creditors and Dubai World respectively (see box), could be called upon by Abu Dhabi once more. The rumour doing the rounds for the last few months has been that any further bailout by the richer emirate could come with the condition that Abu Dhabi takes a controlling stake in some of Dubai’s better assets.
But some are doubtful whether this would be the case.
“It’s not necessarily in Abu Dhabi’s interest to get hold of Dubai’s assets – it could have to step up a shortfall to creditors, so it may be best to dispose of them in the open market,” states one partner.
But Vinson & Elkins UAE managing partner Lewis Jones thinks that the ramifications for the wider Gulf region will relate to a second stage of events some way down the line. “The stage we’re at at the moment is people trying to understand the scale of the problem,” says Jones, adding that communication between creditors and the borrower needs to be established quickly. “Opportunities for other law firms will come when we start looking at asset disposal.”
It is the possibility of key assets coming on to the market that partly explains the interest generated among UK observers.
Between 2005 and 2008 Dubai went on a spending spree through investment vehicle Istithmar and its private equity house Dubai International Capital (DIC).
The bounty included Tussauds and P&O, but crucially prime real estate as well. Properties included Grand Buildings in Trafalgar Square, which Istithmar acquired in 2005 for £155m. Also, Malta-based International Hotel Investment, of which Istithmar is a major stakeholder, bought Metropole Building for £130m and 10 Whitehall Place from Crown Estate. Its portfolio also includes the Adelphi office building on the Strand and the Turnberry Golf Course. DIC also owns hotel chain Travelodge.
Offers for some of the portfolio have reportedly already been made to Deloitte, which is advising on the restructuring. Berwin Leighton Paisner real estate partner Chris de Pury thinks that “the introduction of new stock of this quality is always going to be beneficial to an extremely thin [UK] market”.
The London prime real estate maket has certainly picked up since the summer. Evidence of this can be seen by recent news that SJ Berwin client Evans Randall could sell its interest in Milton Gate – Addleshaw Goddard’s headquarters – for a considerable profit just six months after it acquired the building from UBS Asset Management (TheLawyer. com, 1 December). But unlike Milton Gate, offers on Istithmar and DIC properties would be made at distressed levels and Deloitte will want to avoid a firesale.
However, Dentons’ Cuthbert points out that the lack of administration or Chapter 11 legislation in Dubai means that decisions over how to proceed will require extensive negotiation.
“It has to be by unanimous agreement,” he says. “If one creditor breaks ranks that could scupper a creditor standstill. The hope is that you deal with the 10 or 20 biggest creditors and get them on side and then pressure the smaller ones to come on board.”
Having said that, the fact that the $3.5bn bond issued by Nakheel is due to be redeemed on 14 December means that some agreement will have to be made quickly – if not, it could provoke a default. A group that holds about a quarter of the value of the notes has turned to Ashurst partners Abradat Kamalpour, Matt McDonald and David von Saucken.
The situation is complicated by the fact that the Islamic financing provisions of the sukuk are subject to local laws and each jurisdiction interprets sharia principles differently. Some firms – including Simmons & Simmons – are advising creditors to contact the relevant sharia committee as soon as possible in order to obtain a fatwa.
As such the implications of recent events for Dubai could be as legal as they are commercial. The lack of robust rules regarding protection from creditors could lead to calls for tougher regulations. Similarly, difficulties concerned with divergences between the interpretations of differing sharia scholars could finally make the case for people to follow common sharia norms as per Accounting and Auditing Organisation for Islamic Financial Institutions standards.
The Dubai legal system is still relatively immature and both of these measures could take years to be instituted. By then Dubai might look like a very different place.
When the Dubai government requested a standstill on the $22bn (£13.5bn) owed by its wholly owned subsidiary Dubai World questions were raised about the impact on international firms operating in the Gulf emirate.
One month later and the noteholders of a $3.52bn bond issued by Dubai World subsidiary Nakheel have been paid off and a steering committee of major creditors established, with the expectation that a debt standstill agreement will be signed by the end of this month.
The noteholder outcome was an immediate success for adviser Ashurst, although some debated the merits of taking such a prominent stand against the Dubai government given the high degree of public control of, and intervention in, business activity.
As a result of these developments “a lot of the heat has disappeared”, as Linklaters Dubai-based capital markets partner James Martin puts it.
Nevertheless, the legal market is already being divided into winners and losers. Linklaters has not had such a central role in the aftermath of the Dubai crisis as it did acting for administrators in the UK. Like other firms it advised a number of clients on their exposure when things initially kicked off, but this has been on a more “generic” basis, according to Martin.
It is Allen & Overy (A&O) and Clifford Chance that have dominated the headlines with their ongoing strategic roles, advising the major banks and Dubai World respectively. Neither of these names are a huge surprise.
A&O drafted the debt and Clifford Chance is a long-term adviser to Dubai World.
Less predictable are the key roles played by Latham & Watkins and Taylor Wessing. These two are counsel to the Dubai Department of Finance. Sources claim that Latham reportedly went head-to-head with another top City firm for the international advisory role.
Lead partner at Latham and regional head Bryant Edwards declined to comment for this piece, but one source with knowledge of the matter claimed that “the firm is extremely busy, it has over 100 per cent utilisation, it’s what’s reversed its fortunes”.
Latham’s Middle East practice has faced the challenge of bedding down a management reshuffle, which saw Edwards replace previous regional head Rindala Beydoun at the end of 2008 during a tough time for the market. Even considering Edwards’ seniority, that is not an easy task. Crucially, for the firm’s long-term position in the emirate, Edwards is thought to have a hotline straight into none other than Dubai Prime Minister Sheikh Maktoum.
Taylor Wessing is the unreported and more surprising addition to the roster. The firm is a relative newbie to Dubai, having opened in 2007, although legacy firm Key & Dixon has been there since 1996. However, it has a key asset in the form of former Key & Dixon partner Osama Hassan. This Sudanese-trained corporate and commercial partner has a longstanding relationship with the Department of Finance.
“Were we expecting to be called in to the setting up of the [Dubai financial] support fund [which was set up to manage a $20bn bond programme]? Yes, I was expecting that,” Hassan chimes confidently.
Around 70 per cent of the firm’s advice to the Dubai government is on local law matters. And it is the local connections (Hassan has been in Dubai since 1988) that have become the firm’s unique selling point in this relationship. Most UK and US firms focus on the international dimension. Hassan’s credentials include involvement in reviewing and drafting legislation.
Perhaps he could use this combination of knowledge and contacts to help make the case for the introduction of restructuring and insolvency legislation. The lack of any such legislation has become a moot point among international investors. A royal decree established a tribunal filled with preeminent QCs from the offshore Dubai International Financial Centre to deal with matters related to any potential Dubai World restructuring, adopting some elements reminiscent of US Chapter 11 legislation.
“I know from contacts within the government that the intention is to be more transparent and improve on the [existing] laws,” comments Hassan. “Initially the reaction was, ‘Is the government trying to circumvent onshore bankruptcy laws [as laid out in the Commercial Transactions Code]?’” Ultimately, he stays loyal to his client. “It was about boosting investor confidence and improving whatever already exists,” he adds.
“The lack of insolvency legislation is not unique to Dubai, it’s common to the rest of the region,” pitches in DLA Piper regional managing partner Abdul Aziz Al-Yaqout. “People see [bankruptcy] as something shameful rather than something that’s necessary. [But] companies go bust – it’s what happens.”
Hassan is optimistic that recent events could spell a coming of age for Dubai. “Things are changing: people don’t see the benefit of applying and making use of local bankruptcy laws,” he states. “Events are leading to maturity in the business environment in Dubai.”
Lawyers in kuwait
The Dubai crisis may be leading to the invention of the lawyer in Kuwait, says Denton Wilde Sapte office managing partner David Pfeiffer. “In the past major projects would have no lawyers on them. The parties defaulted to the civil code, [rather than] contracts, to resolve their problems.
They’d say, ‘Why do we need lawyers?’ But if you took that position in Dubai things wouldn’t look that good for you now. These are things that resonate [with the Kuwaiti business class] when they meet in their diwaniya [tent] at night to exchange information and discuss the issues of the day. Suddenly having a lawyer looks more attractive.”
During the past decade rapid rates of growth, adoption of common law regulations, low taxes, a relatively liberal culture and infrastructure links to elsewhere in the region made Dubai an attractive hub for international firms looking for Middle East footholds. But then came the global financial crisis, which took on particular significance locally at the end of last year when the Dubai government requested a standstill on $22bn (£14bn) owed by its wholly owned group of companies Dubai World.
Financial meltdown was averted, however, through a $10bn bailout by its richer neighbour Abu Dhabi. As a result there is the suggestion that Abu Dhabi’s role as the political and economic (and by implication legal) nerve centre for the United Arab Emirates (UAE) could be strengthened further.
Law firms have been aware of Abu Dhabi’s gravitas since the start of the crisis, with its hydrocarbons wealth increasing interest in office launches and leading to some taking the decision to transfer Dubai-based personnel and resources there. However, oil and gas are even more abundant over the border in Qatar, the world’s third-largest gas producer, and Saudi Arabia, the world’s largest oil exporter and the region’s largest economy.
In 10 years’ time, though, could one of these three take over Dubai’s role as the Middle East’s legal hub? The Lawyer has asked some of the senior partners at international and local law firms operating in the region to provide their insights.
In the wake of Dubai’s recent financial troubles, is a strategic shift in the legal world’s Middle East centre of gravity currently taking place? Where will the region’s hub be in 2020?
In this day and age it’s difficult to predict what will happen in a matter of months, let alone another decade. In the medium to long term you would have to be brave to write Dubai off. It has a lot of infrastructure that many countries in the region want to emulate, but would take years to do so. That also assumes Dubai will stand still for the same period, which is very unlikely. It’s pretty clear that, despite the recent headlines, Dubai is very much still in the game. It’s difficult to take away the success of the Dubai International Financial Centre (DIFC), tourism and the free zones, all of which are pillars for future development.
By 2020 must all credible international law firms have significant Arabic leadership in order to survive? If so, what steps has Clifford Chance taken in this direction?
I agree that firms will need Arab leaders, although it will be a competitive advantage and not necessarily a prerequisite for survival. Clifford Chance has recognised this and is actively helping key clients develop their legal capabilities by offering training to local lawyers as well as searching out talented Arab lawyers for regional careers within the firm. We already have an Arabic-speaking partner in the region and it’s our ambition to have more.
Given Abu Dhabi’s stake in Dubai, must all international law firms have an Abu Dhabi base in order to have a credible regional offering?
Undoubtedly, yes. Abu Dhabi cannot be ignored as the financial driver of the UAE. It’s also a very ambitious emirate and so can afford to develop and invest for its future. But you have to show real commitment – there’s no point in having a token presence there. If you’re unable to execute deals on the ground, you have the wrong business model.
Bander Alnogaithan, founder, The Law Office of Bander Alnogaithan, Riyadh, Saudi Arabia
In the wake of Dubai’s recent financial troubles, is a strategic shift in the legal world’s Middle East centre of gravity currently taking place? Where will the region’s legal hub be in 2020?
Dubai has the advantage of an open business environment and a strategic location between South Asia and the Middle East, as well as easy access to the country for foreigners. The latter is a weakness of Riyadh, but all three features are available in Doha. With a growing economy and a more stable one than Dubai’s, Doha is the real competition.
Saudi Arabia is the largest economy in the Middle East and will continue to be so for years, with a growing legal business. Foreign law firms see Riyadh as an important location for business within Saudi Arabia, but more as a major branch office with local, affiliated lawyers. The reasons for this are immigration and travel constraints into and out of Riyadh, not to mention a poor but improving legal system, as well as a lack of local professional lawyers. As the legal system develops in Saudi Arabia under the supervision of King Abdullah, a legal boom will be heading there in the next 10 years. Now is the chance for international firms to establish presences in Riyadh to flourish with the legal environment while competition is low.
Neil Cuthbert (pictured), Dubai managing partner, and David Courtney-Hatcher, construction partner, Dubai, Denton Wilde Sapte
In the wake of Dubai’s recent financial troubles, is a strategic shift in the legal world’s Middle East centre of gravity currently taking place?
Abu Dhabi’s importance as the capital of the UAE and one of the world’s major producers of oil and gas is having an increasing bearing on the strategic planning of international law firms in the region. In 2009 Dentons corporate partner Dean Alderton moved from Dubai to Abu Dhabi and a projects partner will move shortly to meet the upsurge in projects work in Abu Dhabi. We expect further such moves to happen in 2010-11. Demand for legal services in Dubai remains reasonably healthy, but the nature of the services has changed – insolvency, restructuring, Islamic finance and dispute resolution continue to grow in importance.
Where will the region’s hub be in 2020?
Saudi Arabia is attracting foreign investors but remains a difficult place to do business, both from a legal and social perspective. The country has cash to invest and a desire to diversify its economy, but it’s not Dubai.
Qatar plans for a real estate market recovery in 2013 and Dohaland has launched a breakthrough urban and cultural reclamation project to transform the older neighbourhoods in the city into a vibrant economic centre. But it still has a way to go to rival Dubai.
Bahrain will increasingly challenge Dubai’s supposed leadership in the region’s leading financial centre sweepstakes. It was the historical leader and is set to reassert itself in the Islamic finance and funds sectors.
Given Abu Dhabi’s stake in Dubai, must all international law firms have Abu Dhabi bases in order to have credible regional offerings?
We do not expect to serve Abu Dhabi client needs from Dubai. Most of our 65 lawyers in the UAE work interchangeably between both cities. We believe there is also a trend towards greater transparency in the UAE and a more obvious rule of law operating. This is particularly so in Abu Dhabi, which will also serve to heighten its profile further as an international business centre.
Lewis Jones, UAE managing partner, Abu Dhabi, Vinson & Elkins
In the wake of Dubai’s recent financial troubles, is a strategic shift in the legal world’s Middle East centre of gravity currently taking place?
Dubai is, and will likely remain, an important place for professional services firms to operate in. The DIFC has done an excellent job of developing a very business-friendly location, and I don’t see that changing any time soon.
What steps has your firm taken in terms of Arabic leadership?
We have four native Arabic-speaking partners in our Middle East offices out of a total of nine partners, as well as a diverse team of associates. We’ll continue to seek out talented lawyers with an affinity for, or connection with, the region as we build our practice here.
In the wake of Dubai’s recent financial troubles, is a strategic shift in the legal world’s Middle East centre of gravity currently taking place? Where will the region’s strategic hub be in 2020?
Dubai will continue as a primary hub for legal services in the Middle East for some years to come. Despite the financial troubles the markets here have shown the sort of resilience that will remain attractive to international businesses looking for a launch pad or headquarters in the region. Given Dubai’s early-mover advantage, its established and ever-expanding infrastructure and its logistical networks, it seems hard to imagine it being eclipsed.
Sadiq Jafar, Dubai managing partner, Hadef & Partners
What will be the importance of the region’s indigenous law firms? By 2020 must all credible international law firms have significant Arabic leadership in order to survive?
Strong independent domestic law firms will play an increasingly important role. Clients seek quality advice built on depth of knowledge and local expertise and relationships. Longevity, language, operating to internationally expected standards and cultural awareness are undoubtedly valued. The top domestic law firms work on joint assignments with, and referrals from, international law firms on an increasing basis.
Some areas, such as litigation, remain the domain of domestic law firms due to restrictions on rights of audience. Many jurisdictions, such as Saudi Arabia and Bahrain, have additional restrictions on operations of international law firms. In Saudi they must ally with a domestic firm, and in Bahrain certain types of legal opinion can only be issued by locally qualified lawyers.
Rula Dajani, head of the Middle East corporate, projects and finance group, Dubai, Holman Fenwick Willan
Where will the region’s legal hub be in 2020?
By 2020 Riyadh and Abu Dhabi will have developed into core legal hubs. The backbone of both economies is energy and the majority of law firms represented in the region have an interest in this field. Saudi is the largest economy in the region with vast domestic consumption and huge energy reserves. Dubai will continue to act as an important market for law firms.
City firm Speechly Bircham will open its first international office next year, with the most likely location being in the Middle East.
Michael Lingens
The firm has appointed Lesley MacDonagh, former managing partner of Hogan Lovells legacy firm Lovells, as a non-executive member, to help advise on what it describes as an “ambitious growth strategy”.
MacDonagh led Lovells from 1994-2005 during a period of rapid expansion that saw the firm champion an aggressive international growth strategy.
After leaving Lovells, MacDonagh took up non-executive posts at London-listed Segro and Bovis Homes.
MacDonagh will continue to hold non-executive posts at accountancy company BDO Stoy Hayward and offshore firm Ogier.
Speechly managing partner Michael Lingens commented: “Lesley has already contributed to the development of our thinking as a business, and her experience in professional service organisations and listed companies will be invaluable as the firm continues to grow in the UK and internationally.”
Lingens would not confirm the location of the firm’s new office, but said: “We’re looking to grow in private wealth, financial services, real estate and construction – that should give you a clue as to where we’re going.”
Meanwhile, Trowers & Hamlins, which closed its Jeddah base recently, is understood to be feeling the pressure of increased competition from international firms in Dubai and Riyadh.
Another firm that has withdrawn from the region in recent months is Gide Loyrette Nouel, which closed its Abu Dhabi, Dubai and Riyadh offices in October 2010.
Last month Eversheds announced it had merged with Middle East legal consortium KSLG (TheLawyer. com, 25 May). The merger gave Eversheds offices in Dubai, Iraq, Jordan and Saudi Arabia to add to its existing presences in Abu Dhabi and Qatar.
KSLG United Arab Emirates member firm Khasawneh & Associates and Sanad Law Group in Jordan and Iraq will become part of Eversheds’ LLP and will be known as Eversheds KSLG. Saudi firm Dhabaan & Partners will operate as an associated office due to the country’s licensing restrictions.
As revealed by The Lawyer last week (30 May), SNR Denton has relocated its Africa committee co-chair Paul Bugingo to Dubai to broaden its Africa and Middle East practices, while Addleshaws has set out its stall to launch in Dubai to focus on international arbitration (The Lawyer, 24 May).
Eversheds international head Stephen Hopkins said the firm had assessed the economic and political risks of opening in the Middle East and considered it worth the investment. Hopkins added that the “fundamental strength” of the region’s economy made it a natural choice for the firm’s expansion plans.
“A lot of firms expanded extremely rapidly just before the recession hit,” he noted. “They’ve had to rethink their strategies in the past couple of years.”
Hopkins said Eversheds had considered a range of options in the region, but had found a good “cultural fit” with KSLG.
He added that the firm had looked at ways to merge with previous Saudi alliance partner Hani Qurashi Law Firm, but had decided instead to wind up that relationship.
Saudi Arabia has been the main source of problems for Trowers, which closed its Jeddah office less than a year after its launch. Four partners have left the firm’s Dubai office in the past two years, followed by four associates in the past few weeks, and there have been recent redundancies in Riyadh.
A source in the Middle East said that Trowers, which has been in the region for several decades, had suffered from the influx of larger global players in recent years.
Trowers head of international Martin Amison insisted that the firm still has a “substantial presence” in the region.
“We have more than 150 people living and working in the Middle East and in the medium term we expect that number to grow,” he emphasised. “We certainly don’t expect there to be much of a change up or down this year.”
Clifford Chance has named banking and finance partner Robin Abraham as new Middle East managing partner to replace current head Graham Lovett.
Abraham will start his four-year term on 1 May after a regional partner vote. He will take over from Lovett, who continues as regional head of litigation and dispute resolution.
Abraham won a place on the firm’s partnership committee two years ago after being made up in 2005 (29 February 2012). He will have to stand down from that position and give up his place on the audit committee but will remain on the firm’s global finance practice leadership group.
Lovett was unable to stand again for the role after serving two terms (15 June 2010). The litigation partner had headed the firm’s partnership in the region since 2005, having arrived at the Dubai office a year earlier.
Clifford Chance has been making strides in the Middle East over the past year. Earlier this year it established the first Saudi and foreign lawyer partnership in Saudi Arabia (10 March 2014), transferring longstanding co-operation firm Al-Jadaan’s practice into the firm (6 January 2014).
The firm also has offices in Abu Dhabi, Casablanca, Doha, Dubai and Istanbul and has 120 lawyers in the region.
Lovett has overseen the growth of the Dubai team from one to four offices. In 2011 he oversaw the opening of the firm’s office in Qatar.
Abraham said: “My experience in the region and roles on Clifford Chance’s partnership council and audit committee have given me great exposure to the global pressures our clients in the region are facing. We have a strong on-the-ground team of over 120 lawyers and a solid commitment to the Middle East.”
He will take up the role at the same time as Matthew Layton, who was elected in November last year to replace outgoing David Childs, takes over as Clifford Chance’s new global head (28 November 2013).
CMS is launching its second Middle Eastern office in Oman following its September 2012 launch in Dubai.
The Oman office continues the firm’s international expansion strategy, which also saw it launch in Istanbul last year (7 November 2013) as well as Dubai (17 September 2012).
Like Dubai, Oman will have an energy, projects and financial institutions focus. Both offices will work closely together, with the team led by energy, projects and construction practice group manager Stephen Millar, Dubai managing partner Matthew Culver, and consultants Ben Ewing and Amur Al Rashdi.
Ewing trained at CMS before moving to Akin Gump Strauss Hauer & Feld, where he was a lawyer, while Al Rashdi joins CMS from local firm Khalifa Al Hinai.
Millar said the practice areas were growing across the Middle East and were strategically important areas for both the firm and its clients.
“Our strategy is to be where our clients need us to be, and a presence in Oman complements our global offering,” he added.
Today, The Lawyer examines this complex yet lucrative market, looking back at key developments and looking forward at where opportunities lie for future growth.
What does it take to be a success in Saudi? You will find all you need to know in The Lawyer today. Also on The Lawyer:
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The opportunities in Saudi are rich and varied for Western law firms. But they have historically been dependent on a volatile local market of sponsors in order to operate there. This week’s in-depth feature examines the pitfalls of opening an office in the desert kingdom – and keeping it open
Allen & Overy (A&O) and Latham & Watkins have taken lead roles on the issuance of an international sukuk by Saudi Electricity Company (SEC), worth $2.5bn.
The transaction is thought to be the largest-ever Rule 144A sukuk offering, which allows it to be sold to international investors.
Allen & Overy advised longstanding client SEC on the deal, led by the firm’s European Islamic finance chief Atif Hanif, with capital markets partners Sachin Dave and Jamie Durham.
The partners were assisted by senior associate Cieren Leigh and associates Tracy Tond, Anne Korenblit and Edana Richardson. Partner Zeyad Khoshaim and associate Hosam Ghaith advised from the firm’s associated base in Riyadh.
Hanif said: “The bond had a 30-year tranche, which is the longest tenure of any international sukuk issuance. To take this legal structure to markets like the US and get a 30 year issuance is quite groundbreaking. They tend to be 10 years at the long end.”
Latham picked up a role for the joint lead managers from the firm’s New York, Dubai and London offices. Finance partner Harj Raj and capital markets partners Nomaan Raja and Lene Mathasen led on the deal alongside associates Lee Irvine, Muhannad Alnajjab, Ibrahim Soumrany and Theo Kalic.
Meanwhile, Walkers asset management partner Daniel Wood and associate Ciaran Bohnacker, both based in Dubai, advised as Cayman counsel to the issuer. The firm’s listing services chief, Theresa Redmond, advised on aspects relating to the listing of the sukuk certificates on the Irish Stock Exchange from Walkers’ Dublin office.
Allen & Overy has advised SEC on all five of its international sukuk issuances and on three of its four domestic issuances after the client switched firms alongside relationship partner Atif Hanif when he moved from Baker & McKenzie in 2008.
There has been a steady increase in activity related to the sukuk market in recent years. In January 2014, Linklaters won a mandate from HM Treasury to advise on the UK’s first-ever sovereign sukuk issue (31 January 2014).
Capital markets partner Elaine Keats is leading on the transaction alongside Linklaters’ Islamic finance chief Neil Miller and capital markets partner Richard O’Callaghan, both based in Dubai.
Luxembourg is also currently in the process of seeking state approval to issue an Islamic bond, while South Africa is planning to sell its debut international sukuk in 2014.
Charles Russell has signed a formal association agreement with independent Saudi Arabian firm Al-Soaib, gifting it its third foothold in the Middle East.
The firm already has a presence in Bahrain and Qatar, launching the latter office just last year (15 August 2013).
The two firms have worked together in the past, particularly on corporate, finance, litigation and IP issues, but will now work in formal association.
Al-Soaib chair Mohammad Hamad Al-Soaib said the firm had been “actively looking” for ways to work with international firms and that formalising the relationship with Charles Russell would benefit its clients.
Charles Russell’s Bahrain office head Patrick Gearon said the relationship demonstrated the firm’s committment to the region, and Saudi Arabia was a “natural next step” to its existing Middle East presence.
Al-Soaib was established in 1995 and has offices in Riyadh and the eastern port city of Al Khobar.
Charles Russell is joining over 20 international firms with a presence in Saudi Arabia, the vast majority also through formal association agreements with a local firm. Last year Ashurst (12 November 2012), King & Wood MallesonsSJ Berwin (28 October 2013) and US firm McGuire Woods (12 March 2013) all launched in the kingdom. Meanwhile Clifford Chance broke new ground by establishing its own mixed Saudi Arabian partnership (6 January 2014).
Separately, the firm has made two hires for its Bahrain office. Ashley Freeman has joined the firm from the Central Bank of Bahrain, where he was general counsel, to head up its Islamic finance practice. He has become a senior counsel at Charles Russell.
The firm has also hired banking and Islamic finance specialist Wesam Alshafei as a legal consultant from local Bahrain firm Zubi & Partners.
For more on the Saudi legal market, read our in-depth analysis, Keys to the Kingdom
Eversheds’ Middle East chairman Christopher Jobson has joined Clyde & Co as a partner in the firm’s Abu Dhabi office.
Jobson left Eversheds on 30 June and the firm has no plans to install a new chairman in the region. He will start work at Clydes on 1 September.
Jobson has been practicing litigation and arbitration in the Middle East for 10 years, based out of Abu Dhabi and Doha. His clients include regional and international energy companies, financial institutions, protection and indemnity clubs, ship owners and charterers and logistics organisations.
His arrival at Clyde & Co’s Abu Dhabi office takes the number of partners to six, out of 13 for dispute resolution in the region and 40 in total.
Eversheds Middle East managing partner Nasser Ali Khasawneh said: “We had been discussing a possible return to the UK for Chris, and other opportunities in the region, but he has decided that the time is right for him to take on a new challenge.”
Jobson is returning to Clyde & Co having spent the early part of his career working in the firm’s Dubai and Hong Kong offices.
He said he was looking forward to working with the team at Clydes and saw it as a “platform from which to build”.
Clyde & Co Middle East head of dispute resolution and MENA board member Chris Mills said the dispute resolution practice was key to the firm’s strategy in the region.
Eversheds has been moving towards installing local lawyers as regional heads in its international offices in recent years.
Ali Khasawneh was deputy managing partner in the region until 2012 when he replaced Jobson as managing partner, and the latter became the firm’s Middle East chairman (8 October 2012).
The firm also appointed corporate projects partner Dani Kabbani as managing partner of its Qatar office earlier this year.
Simmons & Simmons’ alliance firm in Saudi Arabia, Hammad & Al-Mehda, is extending its reach with a new office in the country’s capital Riyadh.
Simmons has been working in alliance with Jeddah-based Hammad & Al-Mehdar since May 2011 (5 May 2011).
Subject to regulatory approval Hammad & Al-Mehdar’s Riyadh office will open in October.
The office will focus on both firms’ primary sectors of energy and infrastructure, financial institutions, asset management and investment funds, life sciences and technology, media and telecommunications.
Simmons & Simmons Middle East chief Andrew Wingfield highlighted Saudi’s strategic importance as a G20 member and the largest economy in the Gulf Cooperation Council.
“The development of this new office in Riyadh was naturally the next step in building on our alliance in the Kingdom as many of the firm’s clients already have operations in Riyadh,” he added.
Simmons also has alliance firms in Japan and Portugal. It tied up with Tokyo-based TMI in September 2001 (24 September 2001) and Sociedade Rebelo de Sousa in Portugal.
Simmons unveiled a 7 per cent increase in turnover for the 2013/14 financial year, with revenue rising to £268.6m from £250.3m in 2012/13 (8 July 2014).
Net profit also went up by 13 per cent, to around £75m from £66.2m, while average profit per equity partner (PEP) increased by 5.3 per cent to £553,000 from £525,000 last year.
The results mark a turnaround for Simmons, which saw revenue decline in 2012/13 (9 July 2013), while net profit and PEP remained roughly static.
Squire Patton Boggs has chosen legacy Patton Boggs’ Saudi associate firm Khalid Al-Thebity as its local representative, leaving legacy Squire Sanders’ affiliate to pursue independence.
Riyadh-headquartered Al-Enezee was the affiliate of legacy Squire Sanders before the merger with Patton Boggs in June this year (27 May 2014).
The firm confirmed today (19 August) that Al-Enezee has been dropped in favour of Al-Thebity. It is understood that Al-Enezee will continue operating as an independent Saudi practice.
Khalid Al-Thebity has been appointed managing partner of Squire Patton Boggs’ Riyadh office. His practice includes corporate, commercial and financial law, as well as real estate and Saudi-specific litigation and arbitration, with a particular focus on assisting clients in the energy, construction and real estate industries. The firm will continue with the same headcount of four lawyers and one managing partner.
Squire Patton Boggs has approximately 25 lawyers based in the Middle East, providing legal and policy advice to governments, government-owned corporations, investment institutions and private business clients throughout the region.
Legacy Squire Sanders was present in Saudi Arabia for over 20 years. The firm signed its first cooperation agreement with local firm Abdulaziz Al-Assaf 12 years ago, although the alliance broke down and Abdulaziz Al-Assaf went on to form an alliance with legacy Norton Rose (10 December 2007). Squire Sanders tied up with El-Khoury & Partners’ Middle East and North Africa (Mena) practice two years ago (10 October 2012).
Legacy Patton Boggs took on Middle East lawyers from dissolving Dewey & LeBoeuf to establish its first Saudi Arabia association in 2012 (14 June 2012).
