Legal Market Overview
The Iraqi market has been hampered by endemic political instability, consistently low oil prices, sub-standard social infrastructure and geographic demarcations that were roughly forged on the basis of disparate cultural and religious groups that inhabit the three primary areas – the Baghdad metropolitan area, the Basra region and Kurdistan. By any measure, Iraq is a challenging market for clients and law firms alike.
Economic, legal and security considerations often differ drastically across the various regions of Iraq. Baghdad is generally characterised by a growing economy and a much-improved security situation, which has led to more investments and ultimately to more international mandates for local law firms and international firms operating from abroad. Contrast that with the situation in the Basra region, where socioeconomic conditions and thus opportunities in the commercial and legal markets have suffered from conflicts over oil revenues. Kurdistan sits somewhere in the middle: the region has been a relatively stable economic centre in post-2003 Iraq, but the fight against IS, in addition to political conflicts arising from the independence referendum in September 2017, has been a cause for uncertainly among international actors and has had adverse effects on the region’s economy. That said, the economic situation in Kurdistan is showing signs of recovery, and international investments and business transactions are once again on the rise.
As IS continues its retreat from Iraqi strongholds and as the government regains control of some of the harder-hit regions, international investment will be invaluable to nationwide reconstruction efforts. In particular, firms are seeing a marked increase in investment activity from China. Indeed, despite security and stability concerns, the Iraqi market presents some attractive commercial opportunities given its large and relatively young population, its natural resource wealth and its need for reconstruction following years of conflict. The drive for major infrastructure development will especially benefit law firms with strengths in construction, financing and project management, especially in the energy and real estate sectors.
Many large global firms service the Iraqi market from abroad, though some firms have instead established associations with domestic law firms. Law firms with an on-the-ground presence in Iraq are generally either purely domestic firms, or larger regional operators with branch offices in Iraq.