With many major law firms losing money in the Middle East after overinvesting during the oil boom in the 2000s, Simmons & Simmons has followed Latham & Watkins and Herbert Smith Freehills (HSF) in shutting down its Abu Dhabi operations.
Simmons carried out ‘a detailed review’ after its losses in the Middle East, which also includes offices in Dubai and Doha, rose from £243,000 in 2014 to just under £2m in the 12 months to 30 April 2015. The closure of the Abu Dhabi office affects five lawyers, including three partners. The firm’s accounts show in total Simmons has 56 staff, including 29 fee-earners and three partners in the Middle East.
With most international law firms operating in Dubai, just 100km away from Abu Dhabi, the firms argue clients no longer require a local presence in Abu Dhabi. Replicating previous moves by Latham and HSF, Simmons has offered its Abu Dhabi lawyers the option to relocate to Dubai.
A spokesperson for Simmons said: ‘Ultimately, the location of our offices is determined by the key markets for clients in our sectors.’
With the footprint of major law firms closely aligned to the presence of banks, exits from the market over the past year follow the scaling back of The Royal Bank of Scotland, Lloyds Bank, Barclays Bank and Standard Chartered’s local operations.
The closure of Simmons’ Abu Dhabi office comes some 22 years after its launch, with the office considerably weakened in 2007 following a three-lawyer exit to Reed Smith.
With a host of other major law firms making losses in the Middle East, such as HSF, which is known to have lost £600,000 in the Middle East in 2014/15 after multimillion-pound losses in previous years, management at rival firms will be scrutinising their footprint in the region.
tom.moore@legalease.co.uk