Multinational Law Firms Racing to Establish Foothold in Saudi Arabia

In a groundbreaking development, over 30 multinational law firms have set up branches or applied for licenses to operate in Saudi Arabia in the past nine months. This rush to establish a presence in the oil-rich kingdom comes as Saudi Arabia opens its doors to outside legal work, allowing firms to operate independently without the need for a local partner.

The move has been described as unprecedented by industry insiders, with Nabil Issa, managing partner of King & Spalding’s Middle East offices, noting that the current wave of expansion surpasses anything seen in the region in the past 25 years. Firms like Kirkland & Ellis, Latham & Watkins, Clifford Chance, and Linklaters are among those that have seized the opportunity to enter the Saudi market, attracted by the potential for lucrative legal work in a rapidly evolving economy.

However, the decision to set up operations in Saudi Arabia has not been without controversy. Some firms have faced backlash from staff and critics over concerns about the country’s human rights record, including issues such as the murder of journalist Jamal Khashoggi and the imprisonment of activists. Simmons & Simmons, a British law firm, faced protests from employees after announcing its plans to open an office in Saudi Arabia, prompting discussions about the firm’s commitment to its values.

Despite these challenges, the legal market in Saudi Arabia is undergoing significant changes, driven by Crown Prince Mohammed bin Salman’s efforts to modernize the country and diversify its economy through initiatives like Vision 2030. The Saudi Center for Commercial Arbitration has introduced rules aligned with international best practices, providing a familiar dispute resolution framework for foreign lawyers operating in the kingdom.

As firms navigate the complex legal landscape in Saudi Arabia, they must also contend with the requirement that at least 70% of their staff be Saudi national lawyers. This has led to intense competition for local talent, with firms vying for experienced Saudi lawyers who are in high demand across various sectors.

While the road ahead may present challenges, the influx of multinational law firms into Saudi Arabia signals a new era of legal practice in the kingdom, with firms adapting to local customs and laws while striving to uphold their values and standards. As the legal market continues to evolve rapidly, firms are expected to adopt different strategies to build their practices and cater to the diverse needs of clients in the region.