25 ASIAN LEGAL BUSINESS – DECEMBER 2023 WWW.LEGALBUSINESSONLINE.COM SAUDI ARABIA have ambitious plans to grow revenue by at least 60 percent in the next five years. Accordingly, KSA is an important market for us to be in as we strive to achieve our strategic ambitions in the Middle East,” Johnston adds. For Gibson Dunn, opening in Saudi Arabia was a “natural next step” following the setup up of an office in Abu Dhabi earlier this year, the firm’s chair and managing partner Barbara Becker says. “There is immense growth happening in Saudi Arabia, and we have identified a stellar team, covering several key sectors and with exceptional experience in the Kingdom, to advise clients locally and internationally. This is a dynamic time in the Kingdom, and having this team on the ground will allow us to serve our clients in the region better,” she adds. Gibson Dunn has significantly expanded in the Middle East in the last 12 months, adding 14 new partners and 19 new associates, the most by any international firm during this time. MOVING AWAY FROM OIL This international interest in Saudi stems from MBS’ plans to grow the non-oil economy in the country. The world’s top oil exporter is accelerating plans to diversify its economy away from oil under Vision 2030, which aims to develop sectors such as tourism and industry, expand the private sector and create jobs for citizens. Key to this plan is a focus on reforms, to open its markets for international capital and create business-friendly infrastructure to match its investment ambitions. Diversification has been driven by improvements in the regulatory and business environment. As a result of a new set of laws to promote entrepreneurship, protect investors’ rights, and reduce the costs of doing business, new investment deals and licenses grew by 95 percent and 267 percent in 2022, respectively, according to the International Monetary Fund. While Saudi Arabia’s GDP is still primarily dependant on oil, the non-hydrocarbon market has been gaining – now at over 41 percent of GDP – in particular due to growth in manufacturing, retail, and hospitality. A booming e-commerce sector and openness to digital currency is also driving growth in the country’s technology market, which is pegged at over $25 billion this year. Despite lower overall growth reflecting additional oil production cuts, nonoil growth will remain close to 5 percent in 2023, spurred by strong domestic demand, the IMF said. While oil money is key to the financing of this diversification, law firms are following clients in augmenting their regional energy capabilities with other practice groups. “The practice in KSA will offer expertise in corporate, banking and finance, and infrastructure assignments and has broad sector expertise in energy, oil and gas, renewables, infrastructure, transport, technology, hospitality, manufacturing and consumer goods, which aligns closely with KSA Vision 2030,” Addleshaw’s Johnston says. Gibson Dunn will also focus on cross-sectional growth, with capabilities in a number of practice areas in Riyadh. “The office will focus on domestic and international matters relating to administrative law and regulatory work, public policy, mergers and acquisitions, capital markets, project development and finance, and international arbitration. And we look forward to leveraging their experience with other practices and offices around the firm,” says Becker. Capital markets is another sector that law firms are looking at for revenue in the future. Kirkland, Greenberg Traurig, Addleshaw, Latham and others have all added significantly to their capital markets investments in the region. DOMESTIC CAPABILITIES The law firm licensing regime requires firms to have two partners who are to spend at least 180 days a year in the country and commit to not exporting more than 30 percent of advisory work to lawyers working in other countries. And at least half of the lawyers a firm hires must be Saudis. The regime also focuses on the development of the Kingdom’s local legal market through knowledge transfer. The license requires international law firms to commit to localisation quotas, training programs for local lawyers, secondments, engaging Saudi staff, and professional development programs. Latham, one of the first to receive a license, announced a partnership with Prince Sultan University, College of Law in Riyadh, to hire female graduates under the Cooperative Education Program launched by the university and aimed exclusively at females. Nabil Issa, managing partner of King & Spalding’s Middle East offices, outlines the steps the firm has begun taking to fulfil its license commitments. “As we look to the next chapter, we have recruited multiple Saudi national lawyers to our Riyadh office, as well as to our New York and London offices to undergo specialised training prior to returning to Riyadh. We are also establishing a local trainee programme to help develop the next generation of Saudi lawyers,” he notes. “We have seen MENA revenue more than double in the last ten years, and we have ambitious plans to grow revenue by at least 60 percent in the next five years. Accordingly, KSA is an important market for us to be in as we strive to achieve our strategic ambitions in the Middle East.” — Andrew Johnston, Addleshaw Goddard
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