With the news that Latham & Watkins is closing its doors in Doha and Abu Dhabi, it would be easy to speculate that the American giant is struggling in a region plagued by uncertainty. But the reality is more complicated.

Many of the firm's competitors on the ground are unsurprised by the news, with some suggesting that it is the right decision for Latham to take considering it is a recent entrant to the regional market, having launched in 2008 with offices in Dubai, Doha and Abu Dhabi.

The move was revealed by the US giant in an internal memo on Wednesday. All 13 lawyers affected will be offered the chance to relocate to Dubai.

One Middle East-based partner says: "The legal landscape has changed a little bit since Latham got here and there are lots more firms here doing the sort of stuff they maybe had a monopoly on previously."

Others speculate that the firm has been unable to replace revenue from the restructuring work it did in the wake of the 2008 economic crisis, which included advising the government of Dubai and the Dubai Financial Support Fund in the restructuring of Dubai World.

Latham has also previously acted for Qatar Petroleum on a $900m (£609m) retail initial public offering (IPO); Al Mirqab Holding on a $300m (£203m) joint venture to acquire the InterContinentail Hotel in New York; and Saudi Arabia's National Commercial Bank on its $6bn IPO (£4bn).

The view from the market is that although the firm is well-recognised it has been struggling to get as much work in Qatar as it had envisioned, with most of its regional work being done out of its Dubai office.

Furthermore, some partners take the view that law firms are increasingly managing their Doha work out of their Dubai, London and New York offices, removing the need for a presence on the ground in both cities.

One partner says: "We have just a single office in the region but we have people who have really close links to markets other than Dubai."

However, others disagree, arguing that the influx of international firms into the Middle East over the last half decade means that to demonstrate knowledge of the market Qatari clients like to see offices on the ground.

This could impact the firm's ability to capitalise on work in Qatar as the state gears up to host the World Cup in 2022. "The Qatar Football Association will take a dim view of them withdrawing," says one Doha-based partner.

The consensus, however, is that Dubai is still the dominant business hub in the region and as such presents a wealth of opportunities for law firms with the right offering.

Despite ongoing jitters over a possible repeat of the 2008 property crash and the impact of declining oil prices, the economic forecast for Dubai remains healthy, with the 2020 World Expo expected to attract 25 million visitors over six months.

This suggests that Latham's consolidation decision is wise, with one partner labelling multiple regional offices as a "double-edged sword" as different jurisdictions are subject to different economic pressures.

"Firms often make this mistake of viewing each one [office] as a separate profit cell that needs to make profit by itself, which perhaps creates the tendency away from the cooperative, communal-type approach to make a profit from the region," the partner says.

"I think Abu Dhabi is perhaps a market where there's more of a focus on government or government-related work coming to law firms – it's not so much of a commercial regional hub as Dubai."

Another partner in the region adds: "Quite honestly unless you have got a lot of Abu Dhabi work you don't need an office there – it's not a necessity."

But will the 13 lawyers from the closing office stay with the firm if they have to relocate to Dubai? The partners Legal Week spoke to don't expect it to be a problem. One Dubai-based partner also says: "I think if they continue to do the work they are doing and maintain their practice then why not? The people I know who live in Abu Dhabi and Qatar want to move over to Dubai."

Latham is by no means alone in its consolidation strategy. Hogan Lovells made a similar move in 2012 closing its Abu Dhabi office and transferring all of its work to its Dubai base. The firm also has offices in Jeddah and Riyadh.

Partners in the region do not expect Latham to be the last to consolidate its presence in the region either, suggesting that both recent entrants to the Middle East market and established firms will follow in its path.

As is often the case when a number of law firms enter a new or burgeoning market, there are detractors ready to critique the approach firms have taken to launch in the region.

When Latham entered the Middle East in 2008, it did so with a flourish, opening all three offices at once and adding an office in Riyadh in 2010.

"I think one of the issues that I've seen a lot of over the years is law firms seemingly going into a market [in the region] wherever it is but not really knowing why," adds one partner. "You need to find out in a thorough and deep way, so perhaps one of the issues has been that these people [Latham] didn't do that to the extent they should have. They should have done a bit more due diligence."

The question now is whether Latham can turn its consolidation into an advantage and build on its Dubai base to create an effective and stable offering in a region where others have failed to do so.