As the world moves on from the pandemic and growth is firmly back on the agenda at law firms, the impact of the global geopolitical uncertainty triggered by Russia’s invasion of Ukraine and soaring energy prices is shifting firms’ focus when it comes to international expansion.
The Middle East, where rapid vaccine rollouts mean economies bounced back earlier than Europe and where construction is booming under ambitious state-backed investment plans, is inevitably a focus for many.
But where in the past attention focused largely on the UAE, Saudi Arabia’s Vision 2030 means that it too is receiving increased attention from international firms, raising the prospect of increasing competition between the two markets.
Saudi Arabia
In October 2021 listed UK law firm DWF became one of 44 multinational companies, including the likes of PwC and Siemens, confirmed by the Ministry of Investment of Saudi Arabia to have received licences to open in Riyadh as part of the Future Investment Initiative.
The firm joined a growing roster of international players entering the Saudi market in response to the Kingdom’s efforts to make itself a more attractive destination for global corporates, their employees and their families, who in the past may have been reticent about relocating to the country, despite the fact its vast petroleum resources make it one of the largest economies in the Middle East.
Vision 2030 also sets out ambitious plans to diversify the Saudi economy, weaning it off its reliance on the oil sector through a vision built around three pillars: an ambitious nation, a thriving economy and a vibrant society. This plan, which is expected to generate significant investment in the Kingdom and construction work, is also intended to improve perceptions of the country, making it more competitive in the Middle East.
DWF joined a growing roster of international players entering the Saudi market in response to the Kingdom’s efforts to make itself a more attractive destination for global corporates.
Firms with regional headquarters in Saudi are hoping to pick up some of this work. DWF’s licence, announced at the same time as it confirmed an association with local law firm Al-Ohaly & Partners, will also allow it to offer services provided by its alternative legal services provider Mindcrest and Connected Services under DWF Arabia to clients in Saudi and across the Gulf.
Sir Nigel Knowles, group chief executive at DWF Group, said at the time: ‘The ambitions set out by Vision 2030, will transform both the Kingdom and the wider region and are consistent with our goal of creating job opportunities and contributing to the diversification of the Saudi Arabian economy. DWF Arabia and Al-Ohaly & Partners will work closely with our existing teams in Doha, Dubai and globally.’
Other firms also hoping to benefit from Vision 2030 via launches and expansion include US firm Curtis, Mallet-Prevost, Colt & Mosle, which launched in Saudi through an association with newly-formed local outfit Trafua Legal Consultants last summer, and HFW, which launched a transactional practice in Riyadh through the hire of ex-Baker Botts partner Euan Pinkerton in October last year.
Meanwhile, Latham & Watkins added Vinson & Elkins’ former Dubai managing partner Ahmed el-Gaili to work within its associated Riyadh operation – the Law Office of Salman M. Al-Sudairi – last summer. El-Gaili added significant expertise in big-ticket M&A, as well as large-scale energy projects in Saudi Arabia and across the region.
More recently, Herbert Smith Freehills (HSF) announced the hire of Joza Al-Rasheed as a corporate partner in the Riyadh base of its associated firm, the Law Office of Mohammed Altammami (LOMAT).
Other key firms operating in Saudi include Baker McKenzie, Dentons and Clifford Chance (CC), as well as significant local players Khoshaim & Associates, Derayah LLPC – Saudilegal and regional powerhouse Al Tamimi & Company.
Firms operating in the country have already benefited from an uptick in transactional mandates across the board, including banking and PPPs linked with the Public Investment Fund and real estate giga projects such as the NEOM smart city.
UAE
But while Saudi Arabia may be on a mission to raise its profile with the global business community and is already attracting more investment from international firms, the UAE’s position within the Middle East does not look to be under threat just yet.
Its economy bounced back in 2021 largely due to a successful vaccination programme and a reduction in OPEC+ oil production cuts.
Many legal reforms were introduced in the ‘Year of the 50th’, showcasing further signs of a shift from a Shari’ah-based legal system to a more secular system. Over 40 laws were introduced, including the decriminalisation of suicide, cohabitation of unmarried couples and reforms to intellectual property rights and laws. These legal reforms will further bolster the economy as the authorities continue efforts to create a more favourable business environment and improvements to social equality.
Both Dubai and Abu Dhabi remain key legal hubs in the Middle East and both international and domestic law firms have been very active. Practice areas that remain the busiest for law firms include construction arbitration, front-end construction, debt capital markets, TMT and project finance. With the World Expo and the region’s diversification goals to reduce its reliance on hydrocarbons, there continues to be a strong demand for legal services in the UAE.
Examples of firms expanding in the region in recent months include Reed Smith and Norton Rose Fulbright, which late last year added well-known corporate partner Zubair Mir from HSF in Dubai, where he headed the Middle East practice. Taylor Wessing confirmed earlier this year that it would be adding Al Tamimi head of corporate commercial Abdullah Mutawi to head its MENA corporate team, when his notice period finishes.
Qatar
Elsewhere in the Middle East, Qatar remains one of the most prosperous nations, mostly off the back of its colossal export of oil and gas (particularly liquid natural gas), and it has the third-largest reserves in the world. Its natural resources accounted for 60% of its GDP last year.
The country has invested a sizeable amount into developing key construction projects, developments and entertainment facilities in the run-up to the 2022 FIFA World Cup, which is due to take place at the end of this year. Key areas of growth include social infrastructure, healthcare and manufacturing. On the contentious side, lawyers have been kept busy with an increase in construction-related disputes, particularly in relation to supply chain and contractual disputes.
The ending of the Qatar blockade has seen a promising start to regional reconciliations among the GCC countries. Market leaders in the Qatar space include Doha-based international firms Simmons & Simmons, White & Case and Dentons. Regional firm Al Tamimi & Company In Association with Adv. Mohammed Al Marri is also of note, alongside other well-established local outfits, including Al-Ansari & Associates.
North Africa
Firms’ growth hasn’t just been limited to the Middle East though. Activity has also increased in Northern Africa, where many economies have remained resilient.
In Egypt, firms report their businesses are operating at full capacity again after a slowdown in activity at the start of the pandemic, with many working on the building boom prompted by the country’s new cities, which are intended to push eco-friendliness into everyday living.
Energy remains a driving sector in the market, with renewable energy projects, particularly in the field of solar energy constituting a major field of investment. Green hydrogen is also an emerging area of interest in this sector.
Egypt’s legal market remains stable, having stayed away from major partner moves and mergers amid the pandemic. Founded in early 2020, Khodeir & Partners continues to make a name for itself, while ADSERO-Ragy Soliman & Partners demonstrates rapid growth in several practice areas including commercial, corporate and M&A as well as banking and finance. Constituting another promising young firm in the market, Mazghouny & Co has particular strengths in projects and infrastructure and energy, being led by former Shahid Law Firm partner Donia El-Mazghouny. Al Tamimi & Company has expanded its expertise into the maritime sector by opening a new office in Port Said in early 2021. Meanwhile, longstanding firms such as Zulficar & Partners Law Firm, Zaki Hashem & Partners, Attorneys at Law, Shalakany Law Office, Matouk Bassiouny & Hennawy, and Shahid Law Firm remain strong players in the market.
Egypt’s legal market remains stable, having stayed away from major partner moves and mergers amid the pandemic.
Further west, Morocco’s long period of unprecedented economic and political stability means it remains a key gateway for investment into Francophone Africa. The automotive and aviation sectors have been a focus for investment from the US, Europe, China, Korea and Japan, though other fast-growing industries such as healthcare and renewable energy have also attracted substantial capital inflows.
Going forward, the prospects for a post-pandemic recovery are good. The new government installed in October 2021 has a pro-capitalist stance and features more women than ever before. The focus of its agenda is investment and energy projects, roads and ports are key targets for investment.
Furthermore, Morocco has signed a new deal to create power connections that will bring renewable energy to the UK. The country has also signed a partnership agreement with Israel, which is bringing more Israeli investors into the market and boosting sectors such as agriculture and technology.
International firms in Morocco include Gide Cuatrecasas Casablanca – a local collaboration between Spanish and French firms Cuatrecasas and Gide Loyrette Nouel – DLA Piper; CC; Baker McKenzie Maroc; and Norton Rose Fulbright.
In March this year Middle East heavyweight Al Tamimi announced that it would be following their lead and opening in Casablanca, with the move following its 2021 launch in Port Said, Egypt. The launch takes its Africa presence to three offices, adding to its existing base in Cairo.
Elsewhere in North Africa, Dentons announced a combination with Tunisian law firm Zaanouni Law Firm & Associates as part of its ongoing bid to become a pan-African firm.
Despite divergent approaches and contrasting geopolitical and economic climates, there is good reason to be hopeful for countries across the Middle East and North Africa. As oil prices continue to rise Saudi Arabia, again, appears to have the competitive edge in the year to come. LB