Background and market factors

Richard McLerie of JLegal outlines the picture across the region.

When trying to predict what the legal recruitment market will look like in the Gulf region it is easy to be seen as sitting on the fence. There are conflicting signs at every turn and until every scenario plays out, it is impossible to tell how it will affect the region.

General concern surrounding the long-term effect of low oil prices has dominated recent meetings with partners and although confidence generally remains high that prices will rebound during 2015, it has meant that many deals are ‘on-hold’ until the price readjusts.

‘In the past year a couple of international firms have left the UAE, but far more are looking to enter, with Dubai particularly a focus.’
Richard McLerie, JLegal

Similarly the lure of the Gulf region among foreign investors is believed to be dwindling as a result of increased international awareness of Islamic State-related violence in Syria and Iraq, and the civil war in Yemen.

The need to have good legal counsel on the ground is becoming ever more evident. Companies involved in construction, manufacturing and any industry where there is an element of physical risk are likely to want to hire lawyers to deal with any such issues if and when they arise. Although we expect that this is likely to be a big area of growth in the legal recruitment market, roles are still very scarce indeed, with only a few companies looking to establish or grow their in-house teams.

UAE

Actuated by the upcoming World Expo 2020, Dubai is experiencing another construction boom. However, recent first quarter surveys predict a slowdown in real estate prices and that 2015 will see prices correct, giving rise to the inevitable fears of another property crash in the emirate.

With the desire of the UAE to be seen as a legitimate financial hub, the practice of corporate governance is also likely to benefit. The Dubai stock exchange is attempting to dispel notions of insider trading and crony capitalism, and establish itself as a legitimate player on the world stage. A huge number of changes when it comes to compliance need to be implemented for this to become a realistic possibility going forward. This is another area of the market that we predict will experience significant growth in the future.

Recruitment in private practice remains buoyant despite slowing real estate prices. Apart from the numerous associate hires that have happened, there have been a number of high-profile partner hires in the Gulf too. Dubai, in particular, is the busiest and it seems that US firms have the biggest appetite. There have been a number of lateral moves to existing offices as well as to new entrants. In the past year a couple of international firms have left the UAE, but far more are looking to enter, with Dubai particularly a focus.

Saudi Arabia

Following the recent death of King Abdullah, King Salman has been appointed the new leader of Saudi Arabia. Early signals given by the new king indicate an inclination for continuity, which will reassure western business interests in the Gulf. The lower oil prices have prompted the International Monetary Fund (IMF) homepage to cut 2015 growth estimates for Saudi Arabia by 1.6%, but the fund still projects growth of 2.8% this year (put in perspective, IMF predicts that the eurozone will grow by 1.2% this year).

Despite buoyant market conditions in Saudi Arabia, law firms are still struggling to attract good-quality lawyers to the country on a mid to long-term basis. Recruitment of local talent is proving equally challenging, with many firms preferring to target Saudi nationals who have studied abroad.

Kuwait

Roles in Kuwait remain few and far between. The oil sector remains dominant in the economy and has substantial indirect effects on the non-oil sectors. Statistically, Kuwait is still the least attractive Gulf country to investors, as many businessmen refrain from investing their money there, given the bureaucratic impediments and long and debilitating procedures necessary to obtain business licences.

Qatar

Ever since they won the 2022 World Cup there has been an expectation that Qatar will explode into activity. Although it is evident on the ground that there is a lot of construction underway, it does not seem to have been relayed to the legal recruitment market. Law firms remain just satellite offices making replacement hires and in-house roles seem to be a merry-go-round as companies keep ‘restructuring’.

Bahrain

Bahrain was traditionally a very strong financial services centre but with Dubai now replacing Bahrain as the financial services hub for the Middle East and the run on the oil price they have refocused. Despite both these factors Bahrain has a strong and growing economy. ‘Bahrainisation’ has been at the forefront of the economy and therefore once again we are seeing fewer roles in the region.

Oman

Oman too is taking serious steps to diversify its oil-dependent economy. Oman expects a revenue reduction of $260m this year, and a total deficit of over $6bn. It is unclear how the government will make up for this shortfall, but it is thought plans to privatise some state-owned companies will help. Although there are only a few international law firms in Oman, there seems to be high demand for corporate lawyers.

Desire to move to the Middle East and the UAE in particular has not dwindled. The first quarter of 2015 was busy but no particular practice area stood out. Despite the regional concerns it seems firms are looking to bolster in key areas such as construction and real estate.