The world is, literally, in Dubai. In this case 'The World' may be an offshore holiday resort for the globe's richest, but it illustrates a point about the legal market in Dubai and the wider United Arab Emirates (UAE).

The recent influx of international law firms into Dubai has injected some welcome competition into the UAE's legal market – for established local firms and long-serving international firms alike.

Nevertheless, it is a market that is characterised by a lack of consensus as to why it is so important to be there.

Firms even disagree over how many Dubaibased lawyers make a credible legal practice, although the current consensus is around 20. Taking into account the ambitious growth plans of many firms with offices in the region, this figure may well have grown come 2007.

Take Clifford Chance (CC), which last November threw its 30th birthday party. The firm originally set up in the neighbouring emirate of Sharjah in 1975. Now based in the Dubai International Financial Centre (DIFC) – the emirate's answer to London's Canary Wharf – the firm is close to the financial institutions that form its client base. HSBC has been part of the market for 50 years, while the likes of Standard Chartered and Merrill Lynch are newcomers, having finally been persuaded by the growing sophistication of the region and exploding liquidity to set up shop.

The footprint of CC's office is very large, according to CC's Gulf managing partner Graham Lovett, a feature of many of the long-established Dubai offices of law firms. With best friends in Qays H Zu'bi in Bahrain and Al Alawi Mansoor Jamal & Co in Oman, the firm undertakes a lot of Gulf Cooperation Council (GCC) work, as well as operating in the Levant and Pakistan. It also targets Saudi Arabia for its corporate, financial and regulatory work.

Having brought across dedicated capital markets lawyers from London, a senior associate specialising in Islamic finance and a number of real estate lawyers, Lovett says the office is now full service. It currently has 33 fee earners, and aims to hit 50 by the end of the year. Lovett says that by the end of this month CC will already have "exceeded the numbers contemplated in the office's five-year plan drawn up in 2005″.

Such bullishness reflects the feverish state of the market.

Admittedly a very different firm, DLA Piper Rudnick Gray Cary's arrival in Dubai – with all the typical fanfare and big talk expected of the ebullient legal giant – has got firms talking and thinking. The firm has launched a 'full-service practice' from day one, choosing not to site itself in the DIFC, but in Dubai Internet City (DIC). This, according to international development partner David Church, who is heading up the young office, was a conscious message that ties in with the full-service ethos. He says: "We felt it was an important statement to say we are not limiting our practice to financial services. The Dubai office is a regional office."

Like several other international firms, including Denton Wilde Sapte and Clyde & Co, DLA Piper sees its Dubai office as a credible base for its India practice, and also for Africa. With the dual-qualified Jayshree Gupta now on board, it will be interesting to track the Indian deals won as a result of the Dubai presence.

DLA Piper also boasts a telecoms practice in Dubai, with Matthew Glynn relocating from Linklaters in Singapore to provide sector expertise on the ground. "Clients throughout the Middle East really appreciate sector expertise," he says. DLA Piper has space for 35 lawyers in its 11,000 square feet office, but currently it has 11 partners – a sign of the firm's unsurprising growth plans – and five more arriving soon. "Things move very quickly here," says Church.

Linklaters' Dubai launch provides yet another perspective on doing business in Dubai. Linklaters launched in the Gulf with the bold and unexpected hire of CC's Ewan Cameron – who had been with the firm in Dubai for 19 years. Cameron says it was Linklaters' investment banking connections that persuaded him to make the move. "I was trying to develop this market, with some success, but given Linklaters' standing in that field, the synergies were too good to pass up. Our platinum clients were saying that the Middle East industry is a significant growth market across a range of products, and the key investment banks were pivotal to that."

Islamic finance unsurprisingly forms a substantial part of Linklaters' plans. It is an area in which the number of capable practitioners is minimal. The firm hired Luma Saqqaf from Allen & Overy to head up an Islamic finance practice in the region, with Sannam Majid joining her from the London office. CC, Dentons and Norton Rose all boast expertise in this area. The test for Linklaters will be whether it can start winning major mandates.

One of the few firms to actually feel like a proper law firm, rather than an echoey start-up, is Clyde & Co. With the 50th lawyer arriving in the UAE this month, it has one of the biggest presences in the market among the international firms.

The firm's client base has changed as a result of the local companies' changing attitudes to legal advice and the need for it. With a team of public relations officers (PROs) that have built the firm strong contacts with government agencies, the firm has traditionally acted largely for inward investment clients. "That is changing with the growing sophistication of locally-based clients and the development of management teams, in particular in-house lawyers," says partner Anthony Garrod, who argues that clients in Dubai often just want "the job done properly, and are prepared to pay for the service. If you are not working at the coalface, how can you advise clients? This is particularly true in real estate matters." The firm has recently brought across wholesale property specialist Alexis Waller from London. With a change in the law allowing foreigners to own property in Dubai, construction practices now make sense.

But it is an upsurge in inward investment that is arguably the main cause for the current rash of interest in the Middle East among international firms. Government infrastructure initiatives – notably in Qatar – require law firms to have a presence on the ground in order to get a slice of the action. Qatar's statistics are oftquoted; it exports 77 million tones per annum of liquefied natural gas, making for an enormous cashflow. And the family-owned companies that need to get their houses in order – succession planning, decent corporate governance – are ripe for advice pre-IPO.

One firm that surely has to raise its profile in the market is Freshfields Bruckhaus Deringer. Having slipped into the market almost unnoticed at the end of last year, the firm still only has one partner and a handful of associates on the ground. This must make securing mandates difficult in the face of the more populous opposition. The same goes for Simmons & Simmons. Since the firm's launch in Dubai last summer, its presence has not grown beyond one partner and one trainee – although admittedly its main UAE office is in Abu Dhabi, headed up by local heavyweight Ibrahim Mubaydeen. "We are looking to double the size of the office in the next nine to 12 months," says partner Robert Leigh – but that will still only mean a handful of lawyers.

Like Clifford Chance, Allen & Overy, another long-serving Dubai player, is in investment mode. With three partners on the corporate side, two on the banking/finance and projects side and 25 fee earners evenly split between these practice areas, the firm is investing in three further associates to join the finance and projects team and in corporate, while corporate partner Pervez Akhtar will join the team from London later this year.

Partner Ian Ingram-Johnson's practice covers a broad range of banking and projects, together with Bimal Desai. The firm is also moving into the DIFC, having acted on Kingdom Hotels' dual listing on the Dubai International Financial Exchange (DIFX) and the London Stock Exchange. On the projects side, Desai has a strong practice on Omani project finance and gas deals.

Norton Rose, with three years' experience in the market, can be placed somewhere between the fanfare-style launch of DLA Piper and other more cautious entrants. Partner Nadim Khan describes the firm's regional base as having "grown organically". Having opened with five lawyers in 2003, it now has 18. "Growth will continue across our key areas," he says guard-edly, singling out real estate, project finance, aviation and Islamic asset finance.

"Current projections stand at about 50% growth within the next 12 months," he adds.

Norton Rose is by no means alone in targeting asset finance-related work. Aviation finance is a particularly hot area, given plans recently announced by the UAE government to create the world's biggest aviation hub in the emirate – Dubai Aerospace Enterprise.

Both Dentons, which relocated aviation finance partner Owain Jones to Abu Dhabi, and Clyde & Co, which recently took over aviation boutique Beaumount & Sons, are targeting this sector. Dentons regional managing partner Neil Cuthbert also identifies shipping finance as a significant opportunity. He is not alone – hence the recent loss of shipping specialist Niall O'Toole, who now heads up Clyde & Co's Abu Dhabi office.

The arrival of Holman Fenwick & Willan in the market last year, having taken over Hill Taylor Dickinson's office, and rival Ince & Co, which secured a tie-up with local firm Al Jallaf last year, is testament to the level of interest in the region among firms with shipping roots.

Ince & Co's assault began 18 months ago when it hired the Emirates Group's head of legal Chris Walsh. It followed up on this with the news that senior shipping partner Bob Deering is relocating to Dubai.

The firm's local ally, Amna Al Jallaf, one of the few heavyweight female Emirati lawyers, is also a former in-house lawyer at Emirates. Her firm currently has seven lawyers, but the plan is to double that. "We are bidding on a lot of projects, so we will need more manpower," she says.

Tying up with a local firm is an approach few of the UK firms in the market have opted for – Masons and Galadari & Associates being another notable example. "We will distinguish ourselves from the competition by the people we have, who know the market. I think this will give us a lot more punch," Walsh says.

Having been in the market so long, CC alumni have been responsible for forming some of the UAE's strongest local firms. Al Tamimi & Co, the region's biggest independent firm was, until recently, headed up by Essam Al Tamimi, an Emirati who is CC-trained and Harvard-educated. Now with 50 lawyers in Dubai, plus offices in Abu Dhabi, Baghdad, DIC, Sharjah and an associate office in Qatar, the firm is the first local independent presence on the lips of international lawyers.

However, it was pipped to the post as the first local firm to move to the DIFC by Bin Shabib & Associates, a two-partner, 24-lawyer firm that has another ex-CC lawyer, Rashid Bin Shabib, at the helm. Al Tamimi will be headquartered there as of April. However, Al Tamimi will be in the DIFC from June. "We see ourselves as a firm becoming close to the financial markets and the DIFX," says partner Husam Hourani.

"We are currently working with 30 applications from institutions wanting a licence to practise in the DIFC." Al Tamimi previously counted Linklaters as its best friend in the UK, but now plans to enjoy its autonomy after the magic circle firm arrived in Dubai, according to Hourani. "The banks are our priority, and we are very selective in focusing on our long-term relationship clients," he adds, articulating plans to hire 32 lawyers firm-wide this year, on top of the 26 the firm brought in last year in the banking, finance and property practices.

Bin Shabib is also planning to increase its ranks by a quarter this year, with a three-year goal to double the business. Partner Jimmy Haoula says local companies' interest in operating within the DIFC is currently generating instructions for the company.

He says: "The fact that these companies have to meet the stringent regulations of the DIFC provides international players with assurances [about local companies]."

Local heavyweight Hadef Al Dhahiri & Associates' practice also counts ex-CC lawyers among its ranks, including managing partner Sadiq Jafar, another rare example of a dual-qualified local lawyer with international training. The firm has 35 fee earners in Dubai, with a high proportion of lawyers having trained at international firms and who are bilingual.

It is conscious of the need to respond to the recent influx of advisers, but welcomes their arrival and the consequent expansion of the legal sector. "We do not want to become complacent – as a firm we take knowledge very seriously, as it is both a challenge and an opportunity for us all," he says. "Although the UAE market favours lawyers who are versatile, we are now finding that specialised knowledge is also valuable." To this end, at least 10 lawyers will join the firm this year, bringing the total fee earners across Dubai and Abu Dhabi to 66.

Behind all the Dubai hype, the fact remains that the market is unsophisticated. This can easily go unnoticed among the glitz and ostentation.

One potential barrier to growth for all law firms and the wider business community in Dubai is the difficulty of finding quality, both lawyers and support staff – unlike London, human capital is not in endless supply, and the lack of it is currently holding Dubai back. Linklaters' Cameron says: "The local UAE legal infrastructure is a good decade away from where there is a critical mass of competent, well-trained local lawyers who have had some international exposure."

But for non-local lawyers, the immense marketing budget of the Government of Dubai, and the UAE as a whole, has done more than any law firm could have done to put the country on the map as a place to work.

As Sadiq Jafar says: "There are few private entities that could allocate the resources that Dubai does in terms of marketing and advertising. It will hit the bottom line in one way or another, as Dubai has a diverse portfolio of interests that will benefit."

This will surely help ease the region's recruitment difficulties.

"The quality of people prepared to come here and enthuse about the opportunities the place offers is fantastic," says DLA Piper's Church.

Some, however, disagree. And they have a point. Arriving fresh off the plane from London with impeccable London credentials does not make for a great adviser in the Middle East. The bedding-in period for a lawyer arriving from London is a good six months to a year before they are up to scratch on local laws.

And with a dearth of UAE-trained lawyers, the quality of local counsel can be patchy, as can the quality of international lawyers. Not many of the international firms issue UAE legal opinions, although A&O, CC and Dentons do – rights of audience is reserved for local firms.

Furthermore, it is not unusual for counsel to be kicked off a deal for getting the advice wrong – especially on DIFC matters. The investment banks' growing presence will no doubt force firms to raise their game. But as one partner observes: "Unfortunately, the good and the bad have enough work to keep them going."

The frontier-like nature of the legal market is tangible in other ways. It is almost impossible, for example, to get foreign arbitrations enforced in the UAE (it is not a signatory to the New York Convention), and Saudi Arabia (despite it being a signatory). With a new prime minister and ruler of Dubai, this may change – Dubai has been pushing for the convention to be signed for five years at least. Ministers are now commenting on business transactions such as DP World's controversial takeover of P&O, something that would not have happened under the late Sheikh Maktoum's rule.

There are also signs that the emirates will cooperate more fully, making the UAE much more powerful.

Many eyes are now on the capital, Abu Dhabi, the only emirate to have privatised its utilities through multi-billion dollar independent water and power production projects. The self-styled industrial emirate is now sharing its knowhow and cooperating with Dubai. The recent announcement of a new aluminium smelter halfway between the two cities, in Tawila, which is half-owned by The Dubai Aluminium Company and half-owned by Mubadala Development Company – an investment vehicle owned by the Abu Dhabi Government – is evidence of this.

With the Abu Dhabi investment authority boasting $350bn (£202bn) at its fingertips, in comparison to Dubai's $2bn (£1.2bn), and the prospect of cheap energy and oil reserves for the next 100 years-plus, Abu Dhabi has the power to shape Dubai's fortunes too.

So what is Dubai likely to look like in 10 years' time? With no oil reserves, and the construction boom presumably settling down to a more normal pace, an IP-based economy that builds on the brands in the Middle East that have the potential to become global may be the answer. More federal cooperation is also likely, putting less of an emphasis on Dubai, and more on the UAE as a whole.

As one lawyer puts it: "Dubai is a poor emirate – it has to get out of bed in the morning to make its money." For the law firms, this will mean they will have to work harder for their money.