Hiring a Legal Counsel in the Middle East in 2021 – Up Front Investment Leads to Less Long-Term Spending

The Middle East (GCC countries) seem to be emerging strongly from the travails of 2020 and with new and ongoing legal challenges and risks in the region, having in-house legal counsel has never been more important. This is particularly true with the opening of the KSA market and the expansion / focus of many companies’ operations on the Saudi market as the major driver for the region’s growth.

A business, regardless of size and sector will come across a broad range of legal requirements and at a certain point in a company’s lifecycle either as a Middle East hub or a regional corporation, it becomes effective to appoint an in-house legal counsel.

KEEPING IT IN-HOUSE - A COST / BENEFIT ANALYSIS

Analysis shows the positive extent to which having an in-house counsel leads to efficiencies, cost saving and other associated benefits. Hiring an in-house lawyer will involve a financial outlay by the business, but the right appointment can make a significant reduction and/or realignment of exteal legal spend.

As a support function within a business, the hiring of a senior lawyer with 7 - 10 years + Corporate / Commercial legal experience can be a significant initial cost to a business, however with broad legal expertise or previous in-house counsel experience there are real tangible benefits, including long-term savings.

If a company is using exteal lawyers the costs, either fixed fee or on hourly rate, means an organisation can be spending huge amounts of money on exteal lawyers' fees. Managing some of the work in-house means that significant savings can be achieved. For most businesses this can revolve around corporate / commercial work e.g. supply and distribution agreements. For a shipping company, hiring a maritime lawyer can be advantageous, likewise for a private equity fund having a corporate / PE lawyer on hand will offer tremendous insights while significantly cutting back on exteal legal costs.

In the current economic climate, there are more Lawyers available to potentially hire and in the market. This means in-house counsel salaries have remained static and as a result remains an employer lead market.

CONTINUED USE OF EXTEAL LAWYERS

The majority of businesses are likely to still need to employ exteal lawyers, for any large-scale, complex and specialised legal issues that may arise. However, an in-house lawyer can look at reviewing how this has been spent, creating a panel of exteal providers, and then going forward manage and negotiate the cost of exteal lawyers.

A legal counsel also serves as an important conduit between the Management / Board and exteal lawyers, therefore freeing time that can be focused on the core business.

CONFIDENCE – INTEALLY & EXTEALLY

Most companies in the region are currently strengthening their legal, risk, goveance and compliance functions in response to the influx of critical changes to the regulatory field. It is crucial for businesses to assure shareholders, clients and key stakeholders that investing in the business is a wise and safe decision. Investors will be reassured to see that lawyers are an integral part of the business; increasingly, commercially-aware lawyers can be found sitting on the Board and contributing to thought processes and considerations for key strategic decisions. 

Some exteal lawyers tend to become a backup ‘insurance’ for their clients, since most of the legal work can be done in-house with lawyers who are embedded in the business. In-house lawyers understand the commercial needs of a business trying to be competitive and wanting to stay ahead of fast-changing markets. Companies tend to receive better quality and more tailored work from legal professionals vested in the success of the business.

EXPERTISE - LEGAL SPECIALISM & SECTOR EXPERIENCE

Many of my clients (Heads of Legal and General Counsels) actually need to educate their exteal lawyers on their business-specific requirements and their institutional approach to certain transactions. In-house lawyers are able to provide well-tailored and on-point advice to a demanding business. The best are also able to anticipate, identify and resolve legal issues before they become a material problem or threat to the business.

 A sole legal counsel of a company will still need to instruct exteal lawyers to obtain specialist technical advice, such as on tax, litigation and employee issues. The in-house lawyer is a reliable liaison between the company and the law firm.

In some cases, they have worked together in the past and the in-house lawyer can actually identify who may be best to use from their old firm or network, depending on the needs of the business or the deal under consideration. Since the in-house lawyer appreciates the complex legal issues facing the business and the likely work required, he or she will be able to provide more effective instructions to exteal counsel and translate complex legal jargon into terms that the business team will more readily understand.

If you would like to arrange a confidential discussion regarding the Middle East legal market, hiring a legal counsel and how we can assist, please reach out to our DMJ Middle East, Stuart Greenland at dubai@dmjlegal.com.

Stuart is an ex-solicitor with 15 years experience recruiting lawyers and compliance professionals from General Counsel to entry level at a range of multi-national corporations, financial institutions, investment funds, regional companies / family groups across the Middle East, the UK and Europe.