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SPECIAL TO THE NATIONAL LAW JOURNAL U.S. lawyers are not rushing to set up an office in Baghdad, but a small cadre of large firms with offices in the Middle East may reap huge rewards from their strategic location. Lawyers and clients are seeking business opportunities in post-Saddam Hussein Iraq. Firms plan to use their resources in places like Riyadh, Saudi Arabia, and Dubai, United Arab Emirates, to address legal issues that arise when a nation undertakes to overhaul its political, legal, economic, social and industrial institutions. No one knows exactly when Iraq will have the “soft infrastructure” needed to transact business, like a revamped legal system. Meanwhile, the former regime generates legal work from clients who clamor for answers about debts, contracts and other obligations linked to Hussein’s fallen regime. Bryan Cave’s John V. Lonsberg straddles the Iraq of yesterday and the Iraq of tomorrow. The firm represents the governments of Kuwait and Saudi Arabia in claims against the old regime. Kuwait is pressing claims in excess of $100 billion against the old regime arising from the 1991 Gulf War, and has unpaid awards in excess of $20 billion, said Lonsberg, who heads Bryan Cave’s international group and Middle East practice group. Saudi Arabia is pursuing environmental claims topping $6 billion stemming from that conflict. Ten lawyers stationed in Riyadh; Dubai and Abu Dhabi in the United Arab Emirates; and Kuwait City comprise Bryan Cave’s presence in the region. Besides Bryan Cave, at least five other U.S. firms maintain offices in the Middle East: New York’s White & Case, with 10 attorneys, has offices in Riyadh and Jeddah, Saudi Arabia; Baker Botts has three attorneys in Riyadh and one lawyer stationed with an affiliated firm in Dubai; Baker & McKenzie has 33 attorneys in offices in Riyadh, Bahrain and Cairo, Egypt; New York’s Shearman & Sterling maintains an Abu Dhabi office with seven lawyers; and New York’s LeBoeuf, Lamb, Greene & MacRae has one attorney in Riyadh. Clifford Chance has roughly 23 attorneys stationed in its Dubai office, and Holland & Knight has an affiliated office in Tel Aviv, Israel. Preparing for change The United States and the United Kingdom began to lay the foundation for doing business in the new Iraq some six months ago, quietly holding seminars about post-Hussein business opportunities, Lonsberg said. The U.S. firms will have to vie for business against rivals who claim a valid presence in the region. “I expect quite a bit of competition,” Baker & McKenzie Chairwoman Christine Lagarde said. Firms are opening formal and informal channels of communication to consider ideas and client leads. Baker & McKenzie has a global clearinghouse, steered by Eduardo Leite, a Sao Paulo, Brazil, partner and head of the firm’s major-project practice group. An attorney with a client inquiry involving Iraq informs Leite, who coordinates with the firm’s Bahrain, Riyadh and Cairo offices to staff the matter, Lagarde said. White & Case’s recent Iraq initiative is a firmwide dialogue regarding Iraq, said Sandy Kritzalis, head of the firm’s Middle East practice group. “Any firm with an interest in Iraq is probably doing some brainstorming,” Kritzalis said, adding that the firm is positioning itself to assist clients with long- and short-term goals. Existing and potential clients have an immediate need in parsing the legal ramifications of doing work in Iraq. Kritzalis said that the heftiest amount of legal work involves major reconstruction and infrastructure projects, such as large-scale water and power deals that involve harnessing private capital. “There is no play book; there is no game plan,” Kritzalis said. “It’s early days yet.” Before massive reconstruction (and related legal work) can begin, Iraq needs basics like a constitution, a banking system, an airline, accommodations and a telecommunications system, he said. Representing the U.S.-Arab Chamber of Commerce helps Baker Botts broadcast its Middle East presence. On behalf of that client, the firm will host a seminar on April 30 in Washington concerning reconstruction opportunities for business in Iraq. “A lot of our clients are already very interested in Iraq,” said Steven Miles, a partner in Baker Botts’ Washington office. Miles boosted Baker Botts’ Middle East practice when he and partner Stephen Matthews brought over the Riyadh office of Washington’s Arent Fox Kintner Plotkin & Kahn two years ago. LeBoeuf Lamb created a group to focus on legal business in Iraq. Scenarios could involve U.S., European and Middle East entities participating in the reconstruction effort. “We’re looking at all these different dimensions,” said Steven Davis, LeBoeuf Lamb’s co-chairman and head of the firm’s energy practice. Even though LeBoeuf has a small Middle East presence with one lawyer in Riyadh, the firm has approximately 30 lawyers in its Moscow office, which has a sharp focus on the energy sector. The firm’s Iraq focus group included partners from Moscow, London, Riyadh and the United States. London is key to the effort: 60-odd lawyers there serve as a primary backup resource for work in the Middle East, Davis said. “It’s an extraordinarily complicated circumstance,” Davis explained, pointing out that he spoke with a European company owed money from Iraq dating from work done in the 1980s and struggling with the idea of recouping payment within the context of complex United Nations sanctions. Unraveling “who owes what to whom” is a challenge when it comes to Iraq, said Davis. He does not agree that the big legal work is a year or more down the road, given Iraq’s current situation. “There’s a huge need for private capital today to restore and to rebuild all the infrastructure,” Davis said. The legal acumen needed to service clients involves contracting, regulatory work and finance, to name a few, Davis said. Serious regulatory work comes with privatization of sectors like the energy industry, he said. Like Bryan Cave, LeBoeuf Lamb does not think that representing Saudi Arabia will be an impediment to performing legal work in Iraq. LeBoeuf is counsel to the Saudi government with regard to its Natural Gas Initiative, designed to develop an extensive natural gas infrastructure. Such projects demand legal proficiency regarding contracts, finance, regulatory issues and project development. Meanwhile, Bryan Cave’s Lonsberg said it’s likely his firm will open an office in Baghdad. “The issue is when? When is the demand there, when does the Iraqi government say you can do that?” Lonsberg said. The fact that Bryan Cave represents the Kuwaiti and Saudi governments is no obstacle to servicing clients with Iraqi business interests, Lonsberg said. One thing is clear: Iraq must first achieve some level of stability. “The war’s been over about one week,” Miles said. “We have to see where things are going to go.”

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