Competition driving some law firms out of Abu Dhabi

Several western firms have set up offices in Abu Dhabi in the hope of securing work from local companies, only to be left frustrated. Christopher Pike / The National

As Abu Dhabi Global Market opens its doors to international financial and professional services firms, a number of western law companies appear to be packing up and heading back down the road to Dubai.

Experts say the exodus comes as tough competition for a limited supply of work has been exacerbated by high rental costs.

Last month Herbert Smith Freehills became the latest western law firm to shut up shop in the capital, six years after its office opened.

“We are confident that we can continue to provide the quality and breadth of service to our clients in Abu Dhabi from our offices in Dubai and Doha and our global network across the UK/US, Europe and Asia Pacific,” the head of the firm’s Middle Eastern practice Zubair Mir told American Lawyer last month.

The departure of Herbert Smith Freehills follows Baker Botts, which closed its office in the capital in May after six years of operations. In March, Latham & Watkins announced the closure of its Abu Dhabi office together with its branch in Doha.

Several western firms have set up offices in the capital in the hope of securing work from local companies, only to be left frustrated, said a partner with a western law firm in Abu Dhabi.

“Opening an office in Abu Dhabi is seen as a prerequisite for firms pitching for business from Abu Dhabi entities such as Mubadala,” said the lawyer.

“The reality is that there is less work to go around here than in Dubai, and the firms that already have relationships with Abu Dhabi government and corporate entities work very hard to preserve them. “Added to that is the pressure to establish an office in ADGM Square, where rents are about double what you would pay in a premium location like Etihad Towers.”

The type of legal work on offer differs greatly between Dubai and Abu Dhabi, according to James Farn, an Abu Dhabi based partner with Hadef & Partners.

“Dubai is a large commercial centre and the hub for legal activity throughout the Middle East region,” he said. “While you have some commercial activity here in Abu Dhabi, it is overwhelmingly the home of government entities and federal ministries.”

A series of Independent Power Producer (IPP) projects based in Abu Dhabi has attracted a number of firms looking for project-finance work, but even in this space the size of the pie is limited, said Mr Farn.

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