Weil, Gotshal & Manges is to close its Dubai arm this summer, making the top 25 global law firm the third major practice to this month announce Middle East closures.
Opened in 2009, Dubai is the 280-partner firm’s only branch in the Middle East. Weil’s local practice includes private equity, M&A, arbitration and restructuring. Middle East head and private equity partner Joseph Tortorici, who is Weil’s only partner based in Dubai alongside two associates, is expected to relocate to one of the firm’s European offices. He joined the Dubai arm from Weil’s Prague office in 2008.
While the decision makes Weil the third major law firm to announce a Middle East closure in February the move is unusual as international advisers have typically scaled back in secondary regional markets like Qatar or Doha rather than Dubai.
Last week, Clifford Chance and Herbert Smith Freehills (HSF) both confirmed plans to reduce their presence in the Middle East, closing their respective offices in Qatar. HSF also closed its Abu Dhabi branch in June 2015, while US giant Latham & Watkins shut its Doha and Abu Dhabi outposts in 2015. Other firms to scale back include Baker Botts and Simmons & Simmons, which closed their Abu Dhabi bases in 2015 and 2016 respectively.
In contrast, Dentons announced last week that it is to launch an office in Jeddah in Saudi Arabia, with Riyadh-based partner Anas Akel to run the new office.
The retrenchment in its international network comes despite an expansive 2016 for Weil, which posted a 9% income hike to push its revenues to $1.27bn in what looks sure to be one of this year’s pace-setting performances on Wall Street. During the 2016 financial year, profit per equity partner (PEP) rose more than 22% to $3.1m. This is in contrast to 2015, when Weil posted a 1% rise in revenue to $1.16bn and comes after a prolonged period in which Weil had struggled to sustain growth. Between 2010 and 2015, the firm’s revenues contracted 2% before accounting for inflation, well behind most of its Manhattan peers.
City leaders are facing an ominous period of rivalry with leading US competitors in a period in which most top American firms are averaging partner profits in excess of $3m. The gap in profitability will be all the more threatening for City firms trying to retain key partners thanks to Brexit-induced weakness in sterling further eroding their defences.