The United Arab Emirates (UAE) is fast becoming the jurisdiction with the most English solicitors outside the UK. The adage ‘go east, young man’ has heralded a talent goldrush as firms in the Middle East report a torrent of job applications from solicitors hoping to join the 500-plus England and Wales qualified lawyers already in the UAE.

It does not stop with individuals. Firms are also investing in the region – Allen & Overy is relocating 20 partners and associates to its offices in Dubai, Abu Dhabi and Riyadh in Saudi Arabia, taking its total of Middle East-based lawyers to more than 100 for the first time. Ashurst has also announced plans to significantly increase its strength in the region between now and 2011.

Over the past 18 months, a wide range of firms have set up offices in the Middle East, including Anglo-Scottish HBJ Gateley Wareing, which chose Dubai for its first overseas office last year. For US giant Baker & McKenzie, the launch of its 50-lawyer Abu Dhabi office later this year will be its third in the region, while fellow global player Latham & Watkins opted for a ‘big bang’ approach, launching simultaneously in Dubai, Abu Dhabi and Qatar in February.

For others, the route into the region has been by allying with a local firm – international law firm Covington & Burling has just announced an alliance with Institution Quraysh for Law & Policy, which is based in Qatar and has an office in Saudi Arabia.

Against the gloom of the economic downturn in Europe and the US, the tax-free zones, plentiful work and attractive lifestyle mean the Gulf has never been more appealing.

But is there a danger that the region is becoming ‘over-lawyered’? And will the shock waves from the credit crunch mean some firms fail to find their pot of gold at the end of the airport terminal?

Nick White is the resident managing partner of the Dubai office of Trowers & Hamlins. The firm’s links with the Middle East go back half a century, to when it was appointed to act for the Bahrain government, a relationship that continues today.

White has spent the past 10 years in Dubai, with prior stints in the firm’s Oman and Bahrain offices. He says an indication of the size of the UK legal presence in the region is that the College of Law, in partnership with the Law Society, now runs training courses in the region three times a year.

‘A few months ago, I would have said the region wasn’t over-lawyered,’ White says. ‘The pie was growing and there was a piece for everyone. But I have a feeling that some firms may not get the returns they thought they would on the investment they have made in offices and people. I have seen CVs from corporate commercial lawyers who are getting far less work, and far less sexy work, than they were led to believe.’

The newer American entrants are more likely to drop out, he says, ‘because they are happy to throw money at things for a while and then, if it doesn’t work out, they don’t hang around’.

But Christopher Jobson, Eversheds’ managing partner for the Middle East, says the argument that Dubai in particular is ‘over-lawyered’ has been made for some time. ‘The danger is that firms are now transferring issues that should be addressed in the UK to the Gulf,’ he says. ‘While recession is not predicted in the region, the slower rate of growth will inevitably have an impact on the amount of work available.’

The lack of liquidity in the market has meant that some financing of projects has been deferred or cut, says Neil Brimson, who heads Herbert Smith’s Middle East practice. ‘There are also issues on the real estate side but, on the upside, there are some very positive effects from the crisis – private equity in Europe may have dried up, but it is booming here,’ he says.

Paul Sheridan, managing partner of Denton Wilde Sapte’s Oman office, says that while banking and finance may be quieter, ‘the last three or four months have been the busiest of my entire career’.

The economic downturn and its impact on the property market are the subject of daily debate in Dubai, according to Lisa Dale, head of property for leading local firm Al-Tamimi, which has offices in Dubai, Abu Dhabi and Sharjah in UAE, Qatar, Iraq and Saudi Arabia. ‘The diagnosis seems to be that, because demand for accommodation far outstrips supply, with the population growing on a monthly basis, developments coming up to completion in the next year will be all right,’ she says. ‘Those that will suffer are those projects still on paper with developers who have yet to secure their finance.

‘However, the government is very cash-rich, unlike some of the other emerging markets which have to borrow internationally. The sovereign wealth helps insulate the country against the more negative effects of the economic downturn.’

So, what should firms consider if they have the Middle East in their sights?

Nankunda Katangaza, the Law Society’s international policy manager for the Middle East, sketches out some key pointers. Dubai is no longer the ‘big pull’ it was five years ago, she says. ‘There is certainly a slowdown in the number of firms opening offices there and the Dubai International Finance Centre (DIFC) is now pretty saturated, space-wise.

‘However, the firms already there are doing well and the main issue is retention of staff, because they all compete for the same people. New arbitration law in the DIFC, the commercial court there and the existing Dubai International Arbitration Centre may well attract litigation solicitors and barristers.’

Eastern promiseAbu Dhabi, which has been very systematic in planning its growth and development; Qatar, the richest country per capita in the world; and Oman are emerging as the growth markets for foreign lawyers, she says. ‘Abu Dhabi is being very choosy about who it gives licences to, so it is very rewarding for those who are selected.’

Saudi Arabia also has ambitious plans for economic growth and excellent legal work opportunities, says Katangaza. But there are also difficulties, including getting visas and the requirement to open offices jointly with a local firm partner when there is a shortage of firms with suitable international credentials.

It is also almost impossible for women lawyers to work there. One law firm found this out the hard way when it assigned a woman lawyer to a project in Saudi and found it promptly lost the instruction.

However, despite those difficulties, White points out that Saudi Arabia comes 16th in the World Bank’s ease-of-doing-business index, compared with the UAE at 46th, because all the Emirates have their own regulatory and licensing approaches.

City firm Kennedys opened an office in Dubai in 2006 with two partners and an assistant (soon to increase to two) focusing on construction, insurance and arbitration. Kennedys partner Nick Carnell says: ‘As far as the construction industry is concerned, this is the centre of the world.

‘It is important to be based here – before we set up our office, we had an association with Habib Al Mulla. But if you want to do work on more than a one-off basis you have to be here.’

Jobson agrees. Eversheds chose to open first in Doha in Qatar, after Eversheds Paris acted for the state in a boundary dispute with Bahrain in 2001. Initially Jobson was on secondment with a local firm before Eversheds became the first international firm to be licensed in the Qatar financial centre in 2006, where it now has nine lawyers. Last year, it opened an office in Abu Dhabi with seven lawyers.

He says the fact that Eversheds wants to expand in the Middle East at a time of challenging economic circumstances is a ‘vote of confidence in what we are doing. I expect our offices to comfortably double in size over the next year’.

Acting more cautiously, Herbert Smith had taken the view that it could have a strong Middle East practice without having a presence in the region. But Brimson says both regional and international clients now expect firms to have offices in the Gulf, so it opened in Dubai in 2007 and in Abu Dhabi in June. Herbert Smith also formed an exclusive association with Saudi law firm Al Ghazzawi Professional Association.

‘Three or four years ago we were instructed on a major petrochemical project in Saudi Arabia,’ he explains. ‘We had 50 people working on it in London. It is quite clear that, today, you would not be on the radar for that sort of project without a presence here.’

In just 18 months Herbert Smith has gone from zero to 45 lawyers, twice the number originally anticipated. The start-up was helped by two highly regarded lawyers – Zubair Mir and Nadim Khan – jumping ship from Norton Rose and bringing with them their core teams to help build the finance and private equity practice.

Niche IP boutique Rouse International saw a gap in the market over a decade ago, setting up in Dubai in 1997. Rouse now has lawyers from 15 nationalities working for the firm there – ‘it is like a mini-UN’, says Sara Holder, who heads the firm’s Middle East and Africa team.

She says Rouse saw a real need for their expertise. ‘Dubai was a very important shopping and trading hub, and also a crossroads for a lot of counterfeit trade. This is still the case 10 years on, but we have also seen a big development in IP and the acquisition of rights as local companies become more aware of its value to their business.’

Denton Wilde Sapte’s links with the region go back four decades to when it started working for the Kuwaiti royal family. Since then the firm has opened offices in Dubai and Abu Dhabi, Doha in Qatar and Muscat in Oman, with associate offices in Saudi Arabia, Jordan and Kuwait.

Sheridan says: ‘We have one of the largest footprints in the region, with more than 100 lawyers. Too often, people look at the Middle East as though it was one similar jurisdiction – but every jurisdiction is different, not only in terms of the law and its practices, but also its people.

‘Some firms only look to open in major capital market centres and concentrate on sovereign wealth funds. But this is an area where it takes time to get to know people and we are now seeing local and international clients who are keen to use the same firm in all the jurisdictions.’

One increasingly important area of work is Islamic finance. Brimson says that a knock-on effect of the credit crunch, according to received wisdom, is that next year is going to be the golden age of Islamic finance.

‘It is a surprising and humbling experience for Europeans and Americans how much business goes on without their involvement at all,’ he says.

Given the number of sharia-compliant institutions in the region, says Allen & Overy partner Anzal Mohammed, a substantial proportion of the financing transactions it advises on have to be structured on that basis. ‘Our Islamic finance capability is therefore an increasingly important factor in our overall practice in the region.’

The increasing sophistication and range of work are just part of the attraction for those working in the Middle East. Brimson says: ‘I have worked for Herbert Smith in London, Tokyo and Paris, but I find working here absolutely fascinating, both in terms of the quality of the work and the cultural mix. It is a region that is undergoing development at a pace rarely seen elsewhere.’

New laws: new investors


The usual steady stream of CVs crossing Christopher Jobson’s desk as Eversheds’ managing partner in the Middle East has turned into a ‘torrent’ over the last six weeks, as economic problems continue to bite.

‘We are drowning in applications,’ he says. ‘The Middle East is today what Hong Kong and Singapore were 15 years ago. There is great work here if you are good enough, but you need to be clear what you want out of your work and life.’

Neil Brimson, who heads Herbert Smith’s Middle East practice, agrees: ‘The region was an attractive destination before the credit crunch. But what was a flood of CVs has turned into a deluge.’

The recruitment consultancies are also inundated. Maria Coombe, manager of Hays Legal in Dubai, says: ‘We are seeing an unprecedented number of applications from people made redundant or whose practice area has slowed down, particularly those working in property.

‘But applying to come and work in the Middle East shouldn’t be a knee-jerk reaction to what is happening in London. You need to have an affinity for the area to work here. It is not just about the beach and tax-free salaries.’

The economic downturn is having an impact on the legal market. While private practices are still recruiting both from within the region and externally, the in-house market has slowed down with companies resetting their budgets and ‘making do’, Coombe says.

Mark Walters, Dubai-based consultant with legal recruiters First Counsel, has also seen a slowdown in recruitment. ‘Real estate has been affected, but that is because more lawyers are looking for work who may have lost jobs elsewhere. There is tremendous optimism in the region which will counteract some of the downturn, but whether it will eclipse it is uncertain.’

For Lisa Dale, boredom with private practice in Plymouth and a desire for a change of lifestyle with her husband and son prompted her move to Al-Tamimi’s Dubai office in 2001 as an associate in the corporate department. She set up its property practice in 2003, becoming a partner a year later. ‘There were a handful of international firms here then,’ she says, ‘but I’ve always been a maverick. What I liked about Al-Tamimi was its rich cultural diversity.’

Dubai also offers a good working environment for women lawyers, she says. Though it is ‘impossible’ for a woman to work in Saudi, there is no glass ceiling in Dubai and, generally, a higher percentage of partners are women, she says. ‘The diversity of backgrounds, culture, language and religion mean gender is less of an issue than in the UK’.

Jacqueline Latham, a solicitor in DLA Piper’s Dubai real estate team, moved to the Middle East in January. She says: ‘The commercial property market in London is a very mature jurisdiction. Here, there are new buildings, new laws and lots of new investors. It’s very exciting watching something grow like this.’

She finds that, while Dubai is tax-free, the cost of living is high, with rents twice those in London. But, as with so many other ex-pats, she now finds it a ‘home away from home’.

Nick Carnell, partner in Kennedys’ Dubai office, says the firm is recruiting, but also gives out a ‘health warning’. ‘Recruitment consultants seem to feel that, if in doubt, they should punt CVs this way,’ he says. ‘But it is wrong to think Dubai is a western city with sand. It isn’t. Although it is very liberal and inclusive, there are significant differences and it doesn’t suit everybody.’

Dale agrees: ‘I look at dozens of CVs a month and what impresses me is when someone shows initiative and gets on a plane here – rather more than one recent CV said "I have always wanted to work in the Caribbean".’

Open door to Israel?


There is a ‘high chance’ that restrictions on foreign law firms opening offices in Israel under their own name could be lifted by next spring, according to the Israeli Embassy in London.

Shmuel Ben Tovin, the minister for economic affairs at the embassy, says the Israeli cabinet has already approved amendments to the legislation, but the bill is now waiting to be reinstated after the general election in February. ‘It may take a bit of time,’ he says, ‘but there is a recognition that these barriers to trade in services should be lifted.’

Right now the closest foreign firms can get to the profession, says Howard Epstein, consultant with City commercial specialists McFaddens, is to have an association agreement with an Israeli firm. Epstein is based in the offices of associate firm Man-Barak, Israeli advocates and solicitors in Tel Aviv. ‘There are also restrictions on advertising that more "mature" solicitors will remember only too well,’ he says. ‘Accordingly, growing the business relies mainly on word of mouth.’

However, he says it is important to have a presence in the country, particularly as its export-led economy is one of the strongest in the developed world, with more companies listed on NASDAQ than any other country outside North America.

Berwin Leighton Paisner (BLP) partner Jonathan Morris is chair of the firm’s Israel desk and vice-chairman of the British Israel Law Association. BLP works with the main Israeli firms, including Goldfarb Levy, Yigal Arnon, Barnea & Co, Haim Samet, Herzog Fox, Meitar Liquornik and S Friedman.

‘Business from Israel has definitely increased in the last five to 10 years,’ Morris says. ‘And there are a number of UK practices which are keen to open offices there, although the current economic difficulties could put some of those plans on hold.’

Nankunda Katangaza, the Law Society’s international policy manager for the Middle East, is more cautious. Israel is not a priority country for solicitors, she says, though some firms have good working relations there. ‘Israel has its own legal profession, unlike the UAE, for instance, which only has a tiny number of indigenous lawyers, so there is less of a market for foreign lawyers.’

There is also the issue of security – but Epstein says it shouldn’t put firms off: ‘Daily and commercial life is unaffected by the security situation.’

Morris agrees: ‘Tel Aviv it is a very westernised, comfortable environment, with a real cafe culture. When you know the country, security isn’t top of your concerns.’

He also stresses that working in Israel does not shut BLP out of the rest of the Middle East – it has recently been given approval to open an office in Abu Dhabi. ‘I think people recognise that this is business,’ he says. ‘We don’t take sides in any disputes, we simply provide services.’

Grania Langdon-Down is a freelance journalist