Middle East: New order

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There is something momentous unfolding in the Gulf. The wave of protests and general revolutionary feeling that has swept through the Middle East since December 2010, otherwise known as the Arab Spring, has seen governments ousted in Tunisia, Egypt, Libya and Yemen, while civil unrest has even battered the traditionally stable reputations of financial centres such as Bahrain and Kuwait.

Law firms have been just as affected by the tide of uncertainty as any other business and the dramatic extent of regional turmoil has seen international law firms downsize in their droves across the Middle East. As traditional thinking goes, any degree of change creates opportunities; however, the sheer scale and velocity of the market disruption makes this particular situation uncharted territory. Generally speaking, firms remain optimistic about economic growth across the region’s hotspots and recruiters are already starting to see the market look towards replenishing those areas that were the first to be cut back in 2009 and early 2010. So it seems that the outlook for the main financial centres is one of subdued growth following a few lean years. How are the region’s law firms poised to meet demand? Continue reading “Middle East: New order”

Cyprus – Problem Plays

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Last year Cyprus’ legal market appeared enviously impervious to the financial crisis. Twelve months later and the Mediterranean financial hub has been hit hard by heavy exposure to the Greek debt crisis and its successive write downs.

In scenes that have been played out repeatedly across Europe – and which are deeply reminiscent of the early stages of the banking collapse in low corporate tax rival Ireland – the island’s sovereign rating has been downgraded to junk status, amid fears that the Cypriot government will be forced to prop up its toxic debt-laden banks, curtailing its access to the international debt markets. Continue reading “Cyprus – Problem Plays”

Israel – Peak performance

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Freshfields Bruckhaus Deringer’s ‘man on the ground’ in Tel Aviv, Adir Waldman, had a relatively typical New England upbringing. Having grown up in Fairfield, Connecticut, the academically gifted Waldman studied at nearby Yale University, before returning two years later to attend Yale Law School, where he became senior editor of The Yale Law Journal.

In between, Waldman took the unusual step of serving in the Israeli army for 18 months. ‘I had been accepted for law school and I knew that I didn’t want to go directly. Thankfully, Yale has a policy of actively encouraging students to take a year or two off to do interesting things,’ he says. The army was a positive experience and serves him well in his current position. ‘I certainly know most of my Hebrew from the army and I probably feel more at home here as a result,’ he comments. Continue reading “Israel – Peak performance”

Qatari Diar Panel – The In Crowd

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Qatari Diar is a trophy client for any firm with property or Middle East pretensions: being in the property company’s good books means working on some of the most prestigious real estate and finance deals across the world. Since it began life seven years ago, The Qatari Diar Real Estate Investment Company (known to panel firms simply as ‘QD’) has battled with the Candy brothers, financed London’s newest skyscraper the ‘Shard’ and even purchased the US Embassy’s old building in Mayfair. It now has 49 projects with a combined value of $35bn under development or planning in 20 countries around the world.

And to the delight of a handpicked few, the real estate investment company finalised its first-ever law firm panel in March, with 13 different firms making the cut onto one of the six sub-panels (see box, ‘The chosen ones, page 2). Continue reading “Qatari Diar Panel – The In Crowd”

Latin America – Latin moves

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Should anyone ever write a comprehensive history of international law firms, a good place to start would be Caracas. Over half a century ago, the Chicago-based pharmaceutical company Abbott Laboratories headed to Latin America to establish an operation in the Venezuelan capital. It needed a reliable local law firm on the ground, where the lawyers had a good command of English. Its hometown law firm at the time was a relatively young outfit, just seven years old, called Baker & McKenzie. It was a single-site law firm, but eventually Abbott Laboratories persuaded it to come south and establish an office in Venezuela. Ultimately, both client and law firm would walk away happy. Abbott Laboratories retained a consistent standard of legal advice, while Baker & McKenzie retained a lucrative client, plus a guaranteed workflow in a new and untapped jurisdiction. The year was 1955.

A lot has happened since then, but the business case behind why most firms open international offices remains relatively unchanged. Caracas helped Baker & McKenzie develop a taste for foreign jurisdictions, and in time the Western legal industry as a whole would become increasingly bold in its attempt to enter new and emerging markets. The past two decades in particular have seen a flurry of flags being placed in maps, with almost every global region enjoying its moment in the sun, from Eastern Europe and the former Soviet Union, through to Asia and the Middle East. The last destination of choice was Dubai in the heady, halcyon days before the global financial crisis took hold. Throughout all of this, Latin America was relatively unloved, despite Baker & McKenzie’s pioneering attentions. The firm remained loyal to the continent where it all began, establishing 14 offices across Argentina, Brazil, Chile, Colombia, Mexico and Venezuela, but a combination of volatile politics and economics meant that most other law firms weren’t interested in committing to the region, except for a few small US outposts in Mexico City. The recent move by Argentina to nationalise its New York-listed oil and gas company RPF, at the expense of the Spanish energy company Repsol’s majority shareholding, is a reminder of the inherent risks that are still perceived to exist in certain Latin American countries.

Continue reading “Latin America – Latin moves”

CEE – Generating Growth

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Oil and gas? Renewables? Nuclear? Whichever energy source you’re selling, there’s no doubt that the appetite for power in Central and Eastern Europe (CEE) seems almost insatiable. That demand, coupled with the urgent need for infrastructure, is ensuring that even those CEE economies facing the imminent threat of recession are viewing the fulfilment of their relevant construction programmes as a number one priority.

‘National authorities are seeking to improve capacities in conventional energy sources, increasing energy independence and phasing out or upgrading older polluting generation capacities,’ says Bryan Jardine, partner in the Bucharest office of Austrian-headquartered Wolf Theiss. ‘The CEE is a region that has tremendous need. Growing energy demands, coupled with ageing, inadequate and inefficient energy supply infrastructure (a legacy inherited from 45 years of Soviet-era planning and investment) is driving the need for this increased sector work and investment in the CEE.’ Continue reading “CEE – Generating Growth”

Switzerland – Climb every mountain

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UK law firm Speechly Bircham opened a Zürich office in June 2011, marking the firm’s first venture overseas. Private client partner Mark Summers was relocated to Switzerland to head the new operation alongside two associates, with fellow partner William Hancock joining him at the start of 2012.

Speechly’s Zürich offering is further bolstered by international private client head Charles Gothard, who spends one week each month in the city, and financial services partners Jonathan Bayliss and Kate Troup, who are both in Zürich for two or three days each month. Continue reading “Switzerland – Climb every mountain”

Switzerland – Fighting fit

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Switzerland’s dispute resolution market is in rude health. LB talks to the key players about recent headline cases and what the implementation of new arbitration rules in 2012 will mean

The volume of Swiss M&A and capital markets may have flattened out in Switzerland but the global downturn has produced a raft of investor claims against banks and investor management disputes. ‘In tough economic times, people are much more prepared to take their case to court and less willing to settle,’ says Patrick Sommer, partner at CMS von Erlach Henrici (CMS). Consequently, Switzerland has become a major battlefield for asset recovery and enforcement of foreign judgments. Continue reading “Switzerland – Fighting fit”

Switzerland – Splendid isolation

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As an exporting country, Switzerland is not immune to the general crisis and slow down of growth in the rest of Europe. Add to this a tough financing environment, and it is no surprise that the country’s transactional lawyers are reporting a dwindling deal flow.

A key issue for international M&A deals in Switzerland is the strong Swiss franc. In 2011, because prices kept increasing for dollar or euro-based buyers, some inbound acquisitions of Swiss businesses by foreign acquirers failed after following due diligence. However, it’s not just a robust currency that is affecting Switzerland’s M&A transactions. ‘Because the Swiss economy has resisted the global meltdown fairly well in comparative terms,’ says André Gruber, one of the Geneva-based founding partners at Swiss legal practice DGE, ‘Swiss assets are also comparatively expensive.’ Continue reading “Switzerland – Splendid isolation”

The Balkans – Holding up

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The signs had been positive for the Balkan states until very recently. Not only have countries in the region shown great commitment in pushing through reforms to bring domestic legislation in line with the rest of Europe, but many have also shown exemplary discipline in complying with International Monetary Fund (IMF) austerity measures. All this contributed to the IMF’s forecast last year that growth in the Balkans by 2013 would be three times that of western Europe.

However, the knock-on effect from the rest of the continent has been severe. With the eurozone crisis showing no signs of abating, forecasts for growth in the region have suffered amid fears that, as western Europe further tightens its belt and its major banks shrink outside of their home markets to help beef up capital levels, already low levels of liquidity within the region will drop even further. Continue reading “The Balkans – Holding up”