x Abu Dhabi, UAEWednesday 17 January 2018

Merger the making of legal powerhouse

Habib Al Mulla believes that the alliance of his 28-year-old law firm with the international heavyweight Baker & McKenzie will lead to it acquiring more influence in the financial sector.

Habib Al Mulla, one of the country's top lawyers, announced a merger with a global counterpart to consolidate his power in finance. Sarah Dea /The National
Habib Al Mulla, one of the country's top lawyers, announced a merger with a global counterpart to consolidate his power in finance. Sarah Dea /The National

Litigation opponents beware. Habib Al Mulla, one of the UAE's top lawyers, is gearing up for a new bout of activity. And this time he also has the world's biggest law firm on his side.

Mr Al Mulla last week announced the merger of his 28-year-old firm with Baker & McKenzie of the United States. He will become a full partner of the American law firm and assume the global responsibilities associated with such a role. But his focus will remain the UAE, where he believes there is much unfinished business.

"I will be more aggressively involved than before," he says. For a man who has been outspoken on a number of important issues over the years and been involved in some of the UAE's and the region's biggest legal cases, that almost sounds like a threat.

He has firm views on a number of issues and is not afraid to state them. For example, the Dubai International Financial Centre, for which he set up the legal framework, "has not lived up to its remit in some respects", he says, adding: "They have not always attracted the right kind of institution. You cannot call Starbucks a financial institution."

Or the criminalisation of individuals - Emirati or expatriate - who get in financial difficulties over bounced cheques: "It should be dealt with as a civil issue. I don't believe the police and the courts should be used to collect civil debt," he says.

Or the lack of a bankruptcy code in the corporate sector: "It would not be fair just to extend Decree 57 [the bankruptcy legislation set up especially for the Dubai World crisis]. It's a federal issue and we need a proper bankruptcy law, but some people don't see the relevance, especially when the economy is doing well."

The deal with Baker & McKenzie means those kind of viewpoints will resonate in a global, rather than regional context.

When the merger was announced last week, some lawyers in the UAE thought it would mean the immersion of Mr Al Mulla's unique brand within the culture of a big American law firm, and a possible loss of business by being tied to one partner. Mr Al Mulla doesn't believe either argument holds water.

For one thing, he points out that Baker & McKenzie is not a purely American firm, but is truly multinational. For another, he believes legal culture in the UAE is changing, and is no longer the parochial structure characterised by some western lawyers.

"Business in the UAE is not attached to any particular culture, but is truly cosmopolitan, and the legal culture reflects this. Standards are becoming international, rather than local," he says.

But surely UAE legal practice will remain a special case as long as it is based on Sharia? "That isn't necessarily true. Sharia is the dominant form for family law, but the rest of the legal system is derived from the continental European system, ultimately from the Napoleonic code," he explains.

During the financial crisis and the corporate problems it brought, some western lawyers criticised the UAE legal system for its apparent unwillingness to enforce claims by international creditors against UAE companies. But again Mr Al Mulla believes their complaints were far-fetched.

"It's more an issue of contracts. You can always enforce claims if the contracts are drawn up properly...," he says.

Will his firm lose business as a result of being tied to Baker & McKenzie? It's obviously an issue that was discussed in the run-up to the deal. "I don't think it will affect it. Any shortfall will be outweighed by the benefits of increased business via the Baker & McKenzie network. In any case, I've already had discussions with two leading international firms, and they will continue to do business with us," he says.

Borys Dackiw, Baker & McKenzie's managing partner in the Gulf, points out that deals similar to the Al Mulla merger, in Turkey and South Africa, have led to an overall increase in business.

Mr Al Mulla says the tie-up will reinforce his firm's appeal in certain areas where it already has expertise, such as litigation, corporate and commercial cases, especially in property, banking and finance.

In particular, he expects to benefit from new work in the financial sector as UAE markets improve. "If there is going to be a wave of IPOs and sukuk issuance, we can take advantage of that. We've already advised some corporates, but now we can lead the IPO process."

Should the government insist that local companies list on local markets?

"The government should provide the climate for companies to list in local markets. I also believe dual listings - in the UAE and somewhere else - would be the best option."

So as the UAE economy continues to recover from the fallout of the global crisis, Mr Al Mulla and his new partner expect to be at the centre of that growth. "I imagine I'll be equally involved, if not more. I have bigger responsibilities now," he says.