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LOS ANGELES � Gibson, Dunn & Crutcher is the latest law firm to set up shop in Dubai, joining a cadre of Western attorneys looking to score in the growing financial center. The firm is following clients such as investment firm Investcorp, and hoping to attract the private equity, high-end real estate and financial work germinating in the region � work that’s becoming increasingly competitive as more and more U.S. and U.K. firms vie for clients there. “We’ve been doing lots of work in the Gulf for many years, and it seemed natural to open an office there,” said Kenneth Doran, Gibson’s managing partner. “Dubai is the financial center between Asia and Europe, and our hope is that, from Dubai, we can cover the entire region.” Gibson’s office will probably open in the Dubai International Financial Centre before the end of the year, as soon as the firm clears the regulatory process. They’ll initially staff the office with Washington, D.C., partner Peter Baumbusch and will move over other lawyers from the U.S. and U.K. offices, Doran said. This isn’t Gibson’s first foray into the Middle East. The firm had a Saudi Arabia office until 1998, which it closed because “it didn’t fit strategically with what we were doing,” Doran said. But the firm maintained relationships and contacts in the region, and decided to revisit its strategy the early part of this year. Even as Gibson joins the wave of U.S. firms in that region, it has yet to follow the latest rush to China. But Doran said that could change as well. “Asia is something we’re looking at in earnest,” he said. “I do think there is an axis in terms of the financial centers of the world, where Asia feeds into Dubai which feeds into London and New York.” Historically, money has flowed out of the Middle East, largely to London and New York, because there were few investment options in the region, said Gibson attorney Paul Harter, a London partner who helped orchestrate the firm’s move into Dubai. But, as Dubai and other cities in the region have developed into financial centers, private investment is flowing into the region. The majority of international law firms are centered in the Dubai International Financial Centre, a self-contained jurisdiction that contains most of the financial markets and uses law similar to the English system, said Guy Himsworth, a Hildebrandt International consultant who wrote and researched the group’s recent report on the Middle East. While some foreign firms � especially U.K. firms � have been there for decades, the latest influx coincides with the DIFC’s establishment in 2004 and the market liquidity resulting, in part, from high oil prices. “The sheikh is trying to establish Dubai as a world-class financial center, much like what Hong Kong is to Asia,” he said. With the strong presence of U.K. firms and burgeoning interest from their U.S. counterparts, the region is getting competitive for legal work, experts say. Much of the work driving foreign lawyers’ interest is capital markets, project finance and infrastructure, said Lisa Smith, a consultant with Hildebrandt. Success, she said, depends very much on the firm’s practice and clients: “We do think there are opportunities in the market there, but it’s also quite risky, so firms need to balance that with the potential upside.” U.S. firms that have already set up shop in Dubai include DLA Piper; Akin Gump Strauss Hauer & Feld; King & Spalding; and Reed Smith. “Every man and his dog is coming here � you blink and another law firm is opening up,” said Sean Angle, the managing partner for Reed Smith’s Dubai office. “I don’t think a lot of the firms coming here are going to be here in three to five years’ time.” That’s because it’s a competitive environment, with a high cost of operating and rates that are much lower than New York or London, he said. A four-bedroom rental house in a good neighborhood could go for $80,000 or more a year, and office space for more than $80 a square foot. “Companies and law firms see this place and the unbelievable awesome growth going on and they think, �Whoa, I need to get a piece of that action, we can make money there,’” he said. “Yes, you can make money here, but you need to be very sensible, cautious and wise about how you structure your business.” That includes thinking long and hard about the depth of connections and their reliability in terms of work flow, and factor that in with the “crazy” set-up costs, he said. Western lawyers are lucky to have partners paid in the $500 to 600 an hour range, and, discounts such as fee capping are prevalent, he said. Hildebrandt’s Himsworth agreed that the rates are closer to U.S. regional rates than New York rates, something he attributes, in part, to the competition to court clients there. But for the law firms that make it, life in the city is “phenomenal,” Angle said, adding he feels safer in Dubai than in London or Melbourne. “There’s an enormous amount of color and flavor to the whole pace that adds an amazing level of buzz to it,” he said. “It’s the sort of place where you have to know how to sniff out the opportunities, close in on them, and grab them.”

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