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Norton Rose Stakes Claim in Saudi Arabia
International firm is latest to follow White & Case and Allen & Overy in attempt to crack oil-rich market
The American Lawyer
December 14, 2007
The flag of Saudi Arabia
image: EyeWire Photography
With one-fifth of the world's oil reserves under Saudi Arabia's desert sands, it might seem unnecessary to ask what exactly attracts international law firms to the kingdom -- a bit like asking Donald Trump's third wife just what it was that she saw in the billionaire property magnate. But compared to the neighboring emirate of Dubai, which has seen an influx of U.S. and U.K. firms, Riyadh has proved far tougher for foreign lawyers to crack, despite the Saudi government's avowed commitment to privatization and foreign investment. So by Saudi Arabian standards, Norton Rose's recent arrival -- in conjunction with White & Case's decision to beef up its Riyadh outpost and Allen & Overy's launch of a Saudi office in May -- constitutes something of a foreign invasion.
In November, Norton Rose, the U.K. firm with revenue of around $430 million, announced that it was forming an association with The Abdulaziz Al-Assaf Law Firm, a 12-lawyer, Riyadh-based firm that until the second half of this year had been an ally of Squire Sanders. (The U.S. firm describes the split as amicable, and Squire's European practice head Mark Cusick promises a new Saudi association for Squire Sanders in the new year. "It will be bigger and better suited to what we need," he says.) Norton Rose also said that recent recruit Kaamil Ansar, a senior U.S.–qualified project finance and corporate lawyer who joined the firm from Ansar Abbasi in London, would be the firm's man on the ground in Riyadh.
Norton Rose is six months behind A&O, which in May formed an association with Saudi practice Abdulaziz Al Gasim Law Firm, while transferring corporate and finance partner Julian Johansen to Riyadh. White & Case, meanwhile, announced last week that it plans to add four more lawyers in Riyadh while opening a new office in Abu Dhabi.
White & Case is one of a handful of firms, including Clifford Chance and Baker & McKenzie, that already boast well-established practices in the Saudi capital, handling a diet of corporate and finance mandates in a range of sectors. But the limited pool of lawyers and the historic barriers to foreign investment have meant that few international practices have deep roots in the country. As Norton Rose Middle East head Stephen Parish admits, the main challenges for any overseas firm are finding the right local firm to ally with -- and convincing a westerner to move to the country to manage the local relationship. "For cultural and other reasons, there are very limited numbers of high-quality lawyers who want to go and live in Saudi," he says.
The attraction of Saudi Arabia for international practices is obvious. The country joined the World Trade Organization in 2005, and its government has committed to privatizing large parts of the country's economy, slowly attracting investment into sectors such as telecommunications and energy. "The market is vastly different from what it was ten years ago, [and] there aren't many Saudi laws that haven't been changed in some way," says Andreas Haberbeck, a partner at Riyadh and Jeddah firm The Alliance of Abbas F. Ghazzawi & Co. and Hammad & Al-Mehdar. "Plus there's been a very intensive privatization drive. The government really has made good on its plans to privatize large parts of the economy encompassing telecoms, power, petrochemicals, and infrastructure."
There's also outbound work to pick up. In June, for instance, Freshfields Bruckhaus Deringer advised Saudi Telecom on its $3 billion acquisition of a 25 percent stake in the Malaysian telecom company Maxis and a 51 percent interest in Maxis' Indonesian business NTS. Three years ago, Freshfields astutely hired for its Riyadh office Fares Al-Hejailan, the son of Salah Al-Hejailan, arguably Saudi Arabia's highest-profile lawyer. The firm has reaped the benefits since.
In fact, just about every sector in Saudi Arabia is opening up to private capital, apart from the country's prized upstream oil assets. So far the government has given little indication that it's about to open up the Saudi oil fields to international oil companies, but such is the buoyancy in the market that the invasion of international firms shows little signs of abating. The danger is that in the war for talent, they'll arrive too late.
