Morris: Reports of Dubai's death are greatly exaggerated
"The reports of my death are greatly exaggerated" said Mark Twain when his obituary was published. And so might be said about Dubai. It doesn't mean the emirate isn't feeling lousy, but the story isn't finished - the patient is sick and the cure may be hard to find, but the schadenfreude and stereotyping do no justice to the problem. My firm - Denton Wilde Sapte - has for years been heavily committed to the Middle East, a region containing immense wealth and natural resources. The feedback from our clients - and we've been operating in the region since the early 1960s - is that, Dubai's role as a centre, a regional hub, and a tolerant and exciting place to live, will remain. If we judged the economic future of any city primarily by ostentation, profligacy and an excess of property speculation, then New York and London would be written off too. The fact is that there are some great and ingenious businesses in the emirate, and they will survive.
December 09, 2009 at 09:58 AM
4 minute read
"The reports of my death are greatly exaggerated" said Mark Twain when his obituary was published. And so might be said about Dubai. It doesn't mean the emirate isn't feeling lousy, but the story isn't finished – the patient is sick and the cure may be hard to find, but the schadenfreude and stereotyping do no justice to the problem.
My firm – Denton Wilde Sapte – has for years been heavily committed to the Middle East, a region containing immense wealth and natural resources. The feedback from our clients – and we've been operating in the region since the early 1960s – is that, Dubai's role as a centre, a regional hub, and a tolerant and exciting place to live, will remain. If we judged the economic future of any city primarily by ostentation, profligacy and an excess of property speculation, then New York and London would be written off too. The fact is that there are some great and ingenious businesses in the emirate, and they will survive.
We are particularly interested in how the recession is playing out in our clients' businesses and by extension its effect on the way legal work is being commissioned here in London and across our network of offices.
Recent market research by Acritas exposes a subtle story, not of the recession introducing radical change in the way clients buy law in the UK and the Middle East, but acceleration in long-term trends.
The research suggests that over half of London-based buyers of legal services have changed their strategy since the beginning of the recession, and it's not just because they have fewer deals. Clients have become more effective purchasers; they are controlling costs while more efficiently using their in-house teams. Almost 90% of London buyers are interested in using fixed fees more often and just as many are looking for discounts on hourly rates. Panels are being reduced and clients are looking to their advisers to become more efficient businesses.
It's in the area of client service where we have seen the most significant changes. In the past, businesses expected their lawyers to understand their client's market. A major shift in the requirements of Middle Eastern clients is the increase in demand for industry-specific knowledge from external advisers.
The Middle East and London are now more similar in the way legal services are procured than at any time since we opened in the region 40 years ago – a pronounced move away from the billable hour in favour of capped and fixed fees; an increased willingness to litigate; routine and commoditised work being taken back in-house, resulting in increased pressure on general counsel and therefore an increase in demand for secondments. Sound familiar?
Put simply, we see many of the accelerating trends among London clients during the recession also playing out in the Middle East. But this is not to imply convergence. The differences in client behaviours remain deep, and local knowledge still commands a premium. But the recent parallels are striking.
The trend toward greater efficiency in procurement by clients has accelerated; good relationships, while important, are no longer enough to secure future work. Multinational buyers want predictability of service; strong project management and value for money. These changes are clear threats to traditionalist firms hoping the recession will blow over – a return to business as usual.
It's our observation both in London and the Middle East that the genie is out of the bottle. The race is on among law firms to recognise and act decisively on these changes. As Mark Twain also said: "Don't go around saying the world owes you a living. The world owes you nothing. It was here first."
Howard Morris is chief executive of Denton Wilde Sapte.
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