The influx of multinational law firms into Saudi Arabia is reshaping the legal landscape as they vie for a foothold in a tightening market. Over the past two years, approximately four dozen global law firms have entered or expanded their presence in the Kingdom. These moves were facilitated by rule changes that now allow firms to operate independently in Saudi Arabia. The allure of diverse projects, primarily from the $700 billion Public Investment Fund (PIF), has been a major draw. However, with the decline in oil prices, the region faces mounting economic pressures. Saudi Arabia’s budget deficit, projected to hit $67 billion this year, has driven Crown Prince Mohammed bin Salman to scale back ambitious economic plans, thereby affecting consulting work demand by global firms.
Kirkland & Ellis and Gibson Dunn & Crutcher, among others, launched offices in Riyadh, marking a peak in 2023 for such expansions. Firms like Latham & Watkins and White & Case, previously associated with local lawyers, have opened their doors in the country to secure coveted government business. The core of international firms’ work is closely tied to key players like Aramco and government bodies such as the Ministry of Finance.
Despite the challenges, M&A activity in the Middle East remains remarkably high, hitting $69.5 billion in the first quarter of the year. This figure represents the highest quarterly level since 2021. Freshfields Bruckhaus Deringer topped the regional advisory board for M&A deals in the first quarter of this year. This is attributed to guiding high-profile transactions, including Alphabet Inc.’s $32 billion acquisition of Israeli cybersecurity company Wiz Inc.
As the local Saudi market continues to adapt to global economic shifts, prominent law firms like King & Spalding, BCLP, and Pillsbury Winthrop Shaw Pittman are proceeding with plans to establish or expand their presence in Saudi Arabia. Kamran Bajwa of Kirkland highlighted the challenges involved in setting up an office, noting the complexity of recruitment, establishing operations, and managing client work. Despite these hurdles, the prospect of local IPOs remains promising as Middle East governments encourage companies to shift away from international financial hubs.
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