fivehundred magazine > The client side > Staying ahead of the curve in the Gulf

Staying ahead of the curve in the Gulf

The Middle East business world moves into the 2020s with a number of tantalising possibilities as to how it will develop. Saudi Arabia has already set its stall out as a potentially disruptive force to the status quo, with a number of major economic and infrastructure projects planned – the vast King Abdullah Economic City project is an excellent example of this – which could see talent in the region moving across borders in the future, and the region’s geopolitical volatility, richness of natural resources and monetary wealth and rapidly diversifying economies add further uncertainty to future development.

So much for the big picture, but how do Middle East-based in-house lawyers ‘at the coalface’ see the future panning out, and what can law firms do to ensure they are effectively catering to these needs? While travelling to Dubai for The Legal 500 GC Powerlist: Middle East 2019 launch event I sat down with a number of locally based senior in-house counsel to talk about business in the Gulf.

Regulation

Unsurprisingly, regulation and its effects featured heavily in our discussions. When it comes to new business requirements and legislation, staying ahead of the curve is a key consideration for any responsible Gulf GC, as new requirements can come into practice rapidly.

For Dubai-based Citi’s Fauzia Kehar, seeking advice from a diverse set of firms, rather than a few preferred ones, has proved extremely successful. As well as keeping costs low and the quality of advice high, it has had the more subtle benefit of acting as an early warning system for new regulations that may affect the company’s bottom line in indirect ways.

‘There are a lot of regulatory actors, and the UAE has recently seen a lot of different rules come online – it pays to have someone with a fresh pair of eyes and with their finger on the pulse of the regulator,’ she says. ‘This is another advantage of the diversification of law firms that we instruct. You can get feedback not only on major regulation but also more subtle ones that can affect you in a lesser way. This can be very, very useful.’

There was, however, agreement that changes are necessary in certain areas. Filippo Cossalter, legal director for Johnson & Johnson’s emerging markets pharmaceutical group based in Dubai, speaks of how a lack of mature and robust regulatory structures have affected his company’s operations negatively: ‘If there is no IP protection, there is no possibility for us to compete in the R&D field. Some measures put in place to protect local economies, while having an admirable aim, can create more issues in the industry over the long term.’

Diversity and inclusion

Aside from the technical world of regulatory compliance, there is something of a personnel revolution underway in the Gulf. Fadia Mubarak of GARMCO in Bahrain spoke about diversity and, while accepting that the stereotype of the male-centric Gulf workplace had some truth to it in the past, she reported that great strides have been made towards inclusivity.

‘We can see that things are changing a lot when it comes to representation of women in senior roles across the Gulf,’ says Mubarak. ‘Bahrain is a good example of this, as you can see female leaders at the top levels of a number of important companies.’

”I try to understand what’s going on to understand the potential implications to our business. This is one area that we like our external counsel to be extremely proactive in helping me to fill gaps in my knowledge” Filippo Cossalter, legal director, Johnson & Johnson

But how to retain the impetus of this movement? In Mubarak’s opinion, this is best achieved by adopting a two-pronged approach. ‘First of all – and perhaps this goes without saying – the female lawyers themselves will have to work hard. They must improve themselves and their capabilities and take any opportunity to show their case. We must also make business leaders aware of the challenge to change the mindset of limiting female participation in the workforce.’

INDEVCO Group general counsel Roger Tanios has taken matters into his own hands to create an inclusive environment for employees above and beyond what is required by law. ‘In Lebanon we are not obliged to make time for maternity leave, but in our company we have made allowances to go beyond this, and have also introduced flexible hours and have ensured a zero-tolerance policy on any sort of harassment. This gives security for the people within the business.’

Moving beyond where the legislation currently is in this regard could be an excellent way for companies in the Middle East to provide added compensation to employees beyond purely salary and other material benefits.

Attracting and retaining talent

This liberalisation of work flexibility may prove a boon to staff retention at Gulf workplaces, but what is the more general prognosis for attracting and retaining legal talent in the region? Santiago Lucero has been with Alghanim Industries of Kuwait for over a decade, earning a wealth of hiring experience in the process.

In his view, the legal department’s success in recruiting and retaining top legal candidates ‘stems from a very conscious effort to create a compelling value proposition, emphasising the company’s longstanding focus on putting people at the heart of everything it does’. Lucero continues by observing that ‘in-house practice can be a galvanising career choice and every bit as enriching as more familiar routes. As the needs of corporations continue to evolve, there remain countless opportunities for in-house lawyers of all backgrounds in the Middle East. The region offers a richness that is simply unmatched’.

Geopolitics

Our discussions also addressed the Middle East’s geopolitical volatility, and how in-house counsel in the region try to plan for the unforeseeable. Johnson & Johnson’s Cossalter, who supports the group’s external affairs agenda, explained that he ‘does not try to predict the future. With that said, I try to understand what’s going on to understand the potential implications to our business. This is one area that we like our external counsel to be extremely proactive in helping me to fill gaps in my knowledge.’ With that said, other interviewees stated that they feel the focus on geopolitical issues can be overblown and is heavily country-specific. There is perhaps a tendency from those outside the region to group Middle East countries together which in reality do not have much in common in this area.

Conclusion

The Middle East legal business scene looks well set to enter the next stage in its evolution; a majority of the in-house counsel I spoke to expect the business environment they are operating in to change markedly in medium term.

Law firms in the region have a fantastic opportunity to help in-house counsel in the Gulf through this uncertain but exciting transitional period. To do so, it is key for them to pay close attention to the signals which are coming from corporate counsel in order to provide services that pre-empt their requirements in the Gulf’s rapidly changing markets.

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