34 ASIAN LEGAL BUSINESS – MARCH 2024 WWW.LEGALBUSINESSONLINE.COM Last year, a highly improbable restitution of diplomacy was achieved between Shia Iran and Sunni Saudi Arabia that promised to bring stability to a battle-weary (or so it seemed) Middle East. For the first time in a long time, there was no American president hovering among the dignitaries shaking hands. The deal was drawn out in Beijing, and brokered by the Middle East’s largest trading partner, China. The world saw the fruit of deep Chinese financial and political penetration into the Middle East and North Africa, where 19 countries are partners in President Xi’s Belt and Road Initiative. But China’s not the only Asian country seeking to cement trade and investment ties. India, which has historic ties with the region, has become the fastest-rising Middle East trade partner in the last few years. Japan has traditionally been the region’s largest oil importer. And Southeast Asian nations have also witnessed desert funds coming their way, as the Middle East looks to diversify beyond oil, into technology, green energy, and pharmaceuticals. And no sign points towards this more than the ramping up of Asian investments by the Middle East’s sovereign wealth funds (SWF), which represent 86 percent deal value in the Gulf Cooperation Council (GCC). The value of deals by SWFs with Asia rose nearly 60 percent in the first three quarters of 2023, a Bain & Company report found in January. The activity was spread across Asia, including China, India, South Korea, Japan, and Singapore. The primary driver for this Middle Eastern pivot to Asia is diversification, says Thomas Calvert, head of Middle Eastern legal giant Al Tamimi & Company’s China group. “The primary motivator behind this strategic reorientation is economic diversification. Countries in the Middle East are seeking to reduce their reliance on oil revenues and explore new economic frontiers. This need for diversification has coincided with Asia’s rise as a global economic powerhouse, making it an attractive partner for trade and investment,” he notes. Law firm Amereller’s partners Christopher Gunson and Jonathan Noble say this growing relationship is fundamentally driven by economic interdependence. “The relationship also benefits from not having the historical baggage that exists between the Middle East and the West,” they add. CULTURE IS KEY For law firms in the Middle East, this means specialised and culturally adept hires to attract Asian businesses. “At our firm we have recognised the growing importance of Asia in the global legal landscape. We have Japanesespeaking lawyers and also a leading and unique Korean Group, the largest group in the region with dedicated Korean lawyers,” Calvert explains. Cultural familiarity is crucial part of client development for Chinese, Korean and Japanese clients. “Our Korean clients choose us because our Korea Group offers the legal expertise they need, along with language capabilities and an understanding of the Korean culture and way of doing business.” Similarly, for China, Al Tamimi says it has the only China desk with lawyers who speak Chinese. “This commitment goes beyond mere representation; it involves a deep understanding of the Chinese community and its legal requirements.” Despite the high demand for cultural context in client development, the region has not seen Asian law firms getting out their sun lotion and setting up shop in the Middle East. And those that have tried, have been burnt. The Middle East’s economic ties with emerging Asian economies is on the rise as M&A and sovereign investments between the regions drive growth. However, Asian law firms and lawyers are struggling to compete in an overcrowded legal market. BY NIMITT DIXIT Image: oppos/Shutterstock.com MIDDLE EAST PIVOT TO ASIA
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