International firms' attention may have been resolutely on Africa in recent years, but away from the headlines they are also enjoying the benefits of a newly resurgent Middle East. Anna Reynolds looks at the region's comeback and its growing use as a gateway to Africa

Turn the clock back to before the financial crisis and, while Asia was growing in popularity, it was Dubai that law firms were piling into seemingly relentlessly. 

But with the global downturn causing the once booming property and construction markets on which many firms had staked their Middle East success to crash, and the subsequent political instability of the Arab Spring, international firms' interest appears to have shifted away from the Middle East towards Asia and the latest hotspot – Africa. 

But while the headlines may – by and large – have moved away from office openings in the Middle East as firms including Hogan Lovells, Linklaters and Eversheds have targeted Africa, according to those on the ground, the Middle East is very much in the resurgence. 

This time around though there is a new approach to ensuring the region maintains its relevance, with firms increasingly using their Middle East bases as a gateway to Africa as well as profit generators in their own right. 

"It is not a hit-and-run investment, it is more long term," explains Eversheds Iraq managing partner Tawfiq Tabbaa. "Africa presents a different opportunity to the Middle East; it has higher revenue growth year on year because it is a virgin market. Once firms have consolidated their position in the Middle East they look to Africa."

Herbert Smith Freehills' (HSF) head of Islamic finance, Nadim Khan, adds: "Firms are relocating people in the Middle East to boost their links with Africa. We have a network in the Middle East, which means our clients based in Australia can take up mining opportunities in Africa."

It is a story that many international firms describe as they position themselves to benefit from the increasing flow of investment from the Middle East across Africa. 

Freshfields Bruckhaus Deringer, for example, last year advised Dubai buyout house The Abraaj Group on its acquisition of West African dairy business Fan Milk International, which was the largest-ever private equity deal in sub-Saharan Africa. 

The firm's MENA head, Pervez Akhtar, who took the lead role on the deal, says: "This highlights how the Middle East has become a gateway to these types of big-ticket deals in Africa."  

Meanwhile, HSF is advising Qatar Petroleum International on its 15% stake in oil company Total E&P Congo. The deal, worth $1.6bn (£962.9m), is part of a wider agreement signed by the two companies to cooperate on projects in Africa. HSF is also acting for the lenders, including HSBC, in the financing of Etisalat's bid for Vivendi's stake in Maroc Telecom.

"Six months ago the majority of the work was in restructuring, but this has now widened – there is new money for properly structured deals," says Khan. "Jumbo loans is a trend that will continue." 

Husam Hourani, managing partner of Al Tamimi & Company, says: "A lot of firms have added Africa to the regions they cover from the Middle East. There are more investments between the two – there are direct flights and fewer taxes compared to Europe."

But while African transactions may now make up a significant chunk of global firms' work in the Middle East, lawyers are adamant that today there are plenty of opportunities in the Middle East itself. "The healthcare sector is growing and certain consumer areas are underpenetrated," explains Akhtar. "There is a huge demand for better schooling – the private sector has stepped in where the public sector can't deliver. Infrastructure and financial services are also doing well."

Dubai revival

While most international firms have multiple offices across the Middle East – the most recent launch seeing CMS Cameron McKenna this month announce plans to open in Oman – it is Dubai that is enjoying the biggest comeback, after attention had largely been diverted to Abu Dhabi in recent years. 

A resurgence in the real estate market and an upsurge in Islamic finance are helping to fuel Dubai's return to form. And while most large international firms – both UK and US – have been in Dubai for some time, the state is still seeing a handful of new entrants. Most recently Bird & Bird opened in Dubai in November, while US outfit Morgan Lewis & Bockius opened there last summer with a trio of partners from Vinson & Elkins. 

The head of Eversheds' UAE practice, Ben Bruton, says part of Dubai's revival is connected to the greater stability of the market. "It is increasingly seen as a safe haven in the region," he says. 

"Lots of wealth from elsewhere in the Middle East has migrated to Dubai and we are seeing the wealth management businesses of banks getting busier." Bruton adds that many of the residential projects that were shelved in 2008 are now back on the agenda.

Dubai's status will be boosted further still according to local lawyers by its winning bid to host the 2020 World Expo – a world trade fair hosted by a different city every five years. 

The move, which represents the first time a Middle Eastern city has won the chance the host the event, will not only raise the profile of Dubai, but should also introduce more projects work. 

So far projects are in the planning stage for the Expo, as Hourani notes: "We are yet to see the big instructions but there is a lot of optimism that things will start to come soon."

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Gambling on Qatar

Elsewhere, firms are continuing to pin their hopes on the 2022 World Cup in Qatar to significantly ramp up work levels. While they have been opening in the region for some years in anticipation of the event – with Allen & Overy, Clifford Chance, HSF and DLA Piper within the UK top 10 all present there – partners admit that the hoped for flurry of mandates has yet to appear.

So far transactions have largely focused on the rail and infrastructure sectors, but lawyers expect there to be more work in the hospitality and construction sectors. 

However, some lawyers – particularly those at independent firms – have suggested that it will be more difficult for firms without Arabic-speaking capabilities to win the work, particularly given the control the local Government exerts. 

Steven Henderson, head of the UAE real estate practice at Baker & McKenzie Habib al Mulla, which was formed through the merger of Bakers and UAE firm Habib al Mulla last spring, says: "There are limited opportunities for firms that have not showed proper commitment and investment in Qatar."