Shifting sands

With its push into international trade, Dubai is becoming the business hub of the Gulf region – and offers considerable work for British law firms, says Amber Melville-Brown

When magic circle firm Linklaters announced its plans to launch a Dubai office this year, it joined a host of UK firms that have already been attracted by the stream of international investment flowing into the Emirate’s thriving economy.


The three-partner office will be run by Ewan Cameron, former head of corporate and securities at the Dubai office of City giant Clifford Chance, as soon as the appropriate practice licences come through.


Anthony Cann, senior partner of Linklaters, says: ‘The pace of economic and political change in the Middle East is significant, fuelling a demand for premium legal advice as investment into and out of the region increases.


‘We are very excited by the opportunities in this rapidly developing market, not least in assisting both established and new clients to make a successful contribution to the economies of the Middle East.’


A new world is being built in Dubai, both literally and figuratively. Part of Dubai’s grand scheme is to re-invent itself through tourism, and its coastline is soon to feature a staggering billion-dollar vision that will be The World, a collection of man-made islands shaped like the continents on the globe. Putting the map of The World on Dubai is helping to put Dubai on the map of the world. And while billions of cubic feet of sand pour into the sea off the coast, billions of pounds of foreign money is pouring into Dubai’s economy. As well as tourism, it is also making a big push into international trade and finance.


Desert has already given way to manicured lawns, and dusty tracks have been replaced by fast-moving dual carriageways. Gleaming office blocks, business centres and hotels line new roadsides like exotic plants along freshly dug waterways. Dubai is changing fast, capitalising on its mercantile past as a pearl-trading village to become the business hub of the Gulf region. And while industries and businesses flourish, there to facilitate and profit from the growth are British lawyers.


Firms that have put down roots include Allen & Overy, Berrymans Lace Mawer, Clifford Chance, Clyde & Co, and Norton Rose.


Simon Roderick, managing partner of Allen & Overy’s Dubai office, says there has recently been massive development in Dubai. He adds that this development has been driven over the past five or six years by the vision of Dubai’s then Crown Prince, Sheikh Mohammed.


‘That vision recognises that Dubai’s oil reserves are dwindling, and there is a need to move away from the oil-based economy. It is doing this in a number of ways, initially by focusing on Dubai as a regional business hub, but also through a real push for tourism, the real estate boom, and positioning the country as a financial services centre,’ says Mr Roderick.


Sheikh Mohammed, who had been Crown Prince since 1995, became ruler of Dubai last week on the death of his brother, Sheikh Maktoum, who was also the Vice-President and Prime Minister of the United Arab Emirates, and had succeeded his father – one of the founding fathers of the UAE – in the early 1990s.


While the UAE capital Abu Dhabi is the largest of the seven emirates, Dubai – the second largest – is no retiring relative.


Sheikh Mohammed has always had big plans for the country. Speaking in 2002 at the establishment of the Dubai International Financial Centre (DIFC) – a new capital market and financial free zone – his resolve was clear: ‘When a man knows the way to the future, he should take the reins and advance, for this is our duty towards our people and our nation.’


Jeremy Cama, a partner at the Dubai office of national firm Berrymans Lace Mawer, says: ‘You get the feeling that they’ve lit the blue touch-paper and it’s a very fast burning fuse. They’ve probably surprised themselves with how quickly they’ve attracted the money and the attention that they have, and they’re riding the crest of the wave. Who wouldn’t?’


Accordingly, a little fire prevention or damage limitation after the occasional blaze is necessary, and that is where the experience and skills of the British lawyers come in. That has resulted in a certain amount of ‘cultural gear changing’ according to Mr Cama, given that clients in Dubai, the UAE and the Gulf have not generally been used to dealing with lawyers. ‘Here people often won’t consult a lawyer before signing an agreement, or won’t even sign an agreement; they’ll just shake hands and worry about the consequences later. But they recognise that there is a need to change.’


The practicalities for setting up a practice in Dubai are not oppressive. Unless operating in one of the country’s free zones – ‘off-shore’ regions with their own rules and regulations, set up to encourage investment into the country – foreign lawyers need to have a local partner to operate in Dubai. But if they are from a friendly overseas country, which includes Britain, they are granted a special dispensation from the Ruler’s Court. Proof of an established legal practice in another jurisdiction by way of practising certificate, academic qualifications, and an admissions certificate gets the individual in the applicant practice their licence. With that in hand, a residency pass, renewable every three years, is a relatively quick and painless process – unless you do not like needles, as a blood test is required.


Most Dubai offices seem carbon copies of their UK branches, from decor to technology. ‘You could be in our Canary Wharf branch, or our Cheapside branch, or here in Dubai,’ says Mr Roderick. Indeed, the only giveaway is the buzz of the air conditioning and the view of vast stretches of the city towards the sea. Offices are rented, but the demand for properties from overseas investors means that the historical prohibition against foreigners owning property may change.


With the booming economy, more and more foreign law firms are looking to taste the fruits on offer in Dubai. But British lawyers have been in the Gulf for years. Fox & Gibbons was the first international law firm to set up in Dubai in the late 1960s. Its senior partners Jeremy Key and Christopher Dixon set up Key & Dixon in 1996, acting for some of the senior local Arab families and Dubai state corporations. By 2003, when Key & Dixon formalised an association with UK/German law firm Taylor Wessing, it had extensive experience in the region, which the larger firm recognised as a major asset. The office now has four partners, a consultant, five assistants and ten support staff, with additional support from 500 or so lawyers at Taylor Wessing.


Capitalising on an existing practice is not the only way to have a bite of the Dubai pie. Some multi-national law firms opened offices from scratch, such as Allen & Overy in 1977. Servicing clients in Saudi Arabia, its Dubai office was seen as a ‘convenient staging post’ given the difficulties at the time of obtaining a licence to operate in Saudi. Mr Roderick has been there for 18 years. ‘Fairly quickly we began to get some high-quality government work, and the emphasis shifted from us being a Saudi service practice to being a Dubai-focused practice,’ he explains. The office now has five partners and 20 lawyers.


Another long-standing resident, Clyde & Co, has considerable local knowledge, and reckons that its office is probably the largest international law office in Dubai. Its experienced partner Jonathan Silver arrived in Dubai in 1989 as an articled clerk. He never left.


Clifford Chance celebrated 30 years in Dubai in 2005, moving from the World Trade Centre where it has been since 1975, to brand new offices in the DIFC Gate building. The firm sees wider change afoot: ‘You get a real sense that you are seeing a world-class economy being shaped,’ says Dubai managing partner Graham Lovett.


Berrymans Lace Mawer set up in Dubai ten years ago. While the Dubai office receives instructions from clients across the construction industry, Mr Cama is the only full-time partner. He says he is happy to be the ‘tip of the iceberg’, with support from the 100 partners and 800 staff over the firm’s seven UK offices.


A relative newcomer to Dubai, Norton Rose has had offices there since 2003. ‘The Dubai office was opened largely in response to requests from clients,’ explains Dubai managing partner Graeme Muir. ‘We’ve had an office in Bahrain for more than 26 years, and the Dubai office strengthened and increased our existing capabilities. It also positions us well to attract new clients in the region.’


But as all the lawyers recognise, simply having an office in the area is not enough. Allen & Overy has made a conscious decision to bed in to the local ways at grassroots level. ‘The traditional model for practice in Dubai until about ten years ago was to have British secondees on a rolling basis,’ explains Mr Roderick. ‘I believe we changed that model, recruiting people from the region at entry level, fresh out of law school in England, but who had been brought up in the local civil code with a depth of background pertaining to the region.’


Knowing the local culture is vital, says Peter Shaw, a Taylor Wessing partner who is on secondment to Key & Dixon: ‘This is a community where it helps to know individuals in various government bodies. Rather than get involved in correspondence or even on the ’phone, you go to see someone, you have a coffee, and sort it out face to face.’ Local relationships can also help, Mr Cama explains, and Berrymans’ link with local firm Albarwadi has proved beneficial. ‘These important relationships are paralleled in a number of firms with similar arrangements. They give you access to advocates, translation services and local courts,’ he says.


While steeped in history, the country in its present form is young. Getting in on the ground floor presents exciting opportunities for international lawyers. For example, Mr Shaw is instructed on the new Dubai Metro project and the Dolphin gas project, ‘a massive energy project transporting natural gas from Qatar to the Emirates and Oman, to provide cheap energy for the foreseeable future’. Capitalising on its experience of the Middle East and work in the infrastructure field, City firm Ashurst also opened an office in Dubai in September. The office’s prime focus is on energy, transport and infrastructure projects, and it is also acting on the multi-billion dollar Metro project. DLA is to follow shortly too.


According to Mr Roderick, there are three basic types of work in Dubai at present: general client service, including business start-ups, employment, commercial and corporate advisory work; joint venture, business restructuring, litigation and arbitration; and ‘big ticket’ projects, acquisitions and finance deals.


Allen & Overy, he says, deals in the big-ticket market around the world, and in Dubai it is no different. In the mid-1980s, it assisted with the setting up of Emirate Airlines. Recent instructions came from the government of Pakistan to advise on the $2.6 billion (£1.5 billion) part privatisation of Pakistan Telecom, and the office has been instrumental in advising on the new legislation for the DIFC. As well as moving into the DIFC, Clifford Chance also took a leading strategic role in its creation, being integrally involved in drawing up a legal and regulatory blueprint for what is expected to be a ‘world-class financial centre’.


Clyde & Co partner Anthony Garrod sees the whole market expanding: ‘If the world comes here and does sophisticated transactions, the requirement for services and specialisation will grow, and the requirement for quality advice will grow. Firms will grow, departments will grow, reputations in our areas of specialisation will grow, and that’s what Dubai is banking on.’


Clyde & Co’s Dubai operation – its ‘most diverse office’, says partner Alec Emmerson – provides a cradle-to-grave service for its clients. Arbitration is a key part of the caseload: ‘We’ve just come to the end of a $400 million telecoms arbitration and investment dispute with Canadian and English arbitrators offshore, and Indian investors. It was managed by us out of Dubai, under the International Chamber of Commerce rules.’


Non-adversarial by nature, the local culture is one of compromise, and a number of firms offer arbitration. Mr Shaw, a qualified mediator and arbitrator in the UK, uses those skills as Dubai hooks on to the procedure. ‘More and more commercial contracts are being drafted to include an amicable resolution provision as a condition precedent to a more formal dispute resolution process,’ he says. He explains the benefit of mediation in Dubai: ‘Countries like the UAE are developing industrially and commercially at a rapid pace, but nevertheless this is still a relatively young country and the court system is fairly unsophisticated. You would not particularly want to take a major commercial case into the courts here, as the outcome could be incredibly uncertain.’


But inevitably some cases do end up before the courts. Without rights of audience, British lawyers need to instruct a local lawyer as advocate both in the UAE federal courts and in the Dubai local courts. Locally, the court system comprises the Court of First Instance, the Court of Appeal and the Court of Cassation. There is an automatic right of appeal to the Court of Appeal, and an appeal to the Court of Cassation on points of law alone, although there is currently a two-year waiting list for final appeals to be heard. Delay, nominal costs awards and small damages are ‘reason enough to consider mediation’, says Mr Shaw.


But what of the practicalities of working in Dubai? While western firms work a Monday to Friday week, the official weekend in Dubai is Thursday and Friday, ‘slightly inconvenient at times as you only have three days’ overlap with the rest of the world,’ says Mr Roderick. Some businesses are closed Friday and Saturday, and this may become the norm as Dubai settles into its position as business hub for the region and an important interface with the rest of the world.


However, with temperatures up to 48 degrees, heat is a problem in the summer. ‘This is not a pedestrian city,’ admits Mr Dixon. ‘Everyone travels everywhere by car.’ Not surprising given that a walk of ten minutes leaves you drenched and exhausted. But there are plenty of positives to outweigh getting a little hot under the collar, the lawyers attest. ‘Dubai was probably regarded some years ago as a bit of a hardship posting. You could not say that today,’ says Mr Shaw. Mr Dixon agrees: ‘For any lawyer to come out here and do a stint for a few years would do their CV absolutely no harm whatsoever. Whereas in the past firms might have had difficulty in getting people to come out, now they’re queuing up.’ Mr Garrod is equally enthusiastic: ‘You get off the plane and there is an energy and excitement about the place. If you really want to work hard, you can achieve whatever you want to achieve here.’


Given the immense changes under way, and the huge opportunities for lawyers, is there any risk that Dubai is too good to be true? ‘People are always saying it’s a bubble waiting to burst,’ says Mr Roderick. ‘Dubai has always been buoyant, and it never does burst.’ Mr Cama predicts that by careful planning, the country will avoid any massive implosion.


It seems that as business and finance replaces the traditional black gold that once poured out of the desert, UK law firms have a vital role to play in oiling the wheels of Dubai’s transformation.


Amber Melville-Brown is a consultant at David Price Solicitors & Advocates in London