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With signing-on fees of up to $500,000, Saudi lawyers are reaping the rewards of a scramble by international firms to find local partners.

International law firms are beefing up their Gulf operations, hoping to profit from construction deals, IPOs and M&A activity in the region as other markets start to feel the bite of a slowing global economy.

But despite years of economic reform, Saudi Arabia -- the top prize - remains out of reach for many firms, while demand for legal services in smaller countries like Kuwait is still limited.

Succeeding in the kingdom requires not only detailed knowledge of Islamic Sharia law, but also, perhaps more crucially, a local Saudi partner.

The upshot is a bidding war between international law firms that has led to some Saudi lawyers commanding massive six-figure salaries.

"There are some surprisingly big names who are going out and just paying obscene amounts of money to people," says Mohammed Al Sheikh, senior partner of the Law Office of Muhammed Al Sheikh, and legal partner of international law firm White & Case.

"A six-year associate [could] get paid a cheque for half a million dollars... just to join," he says.

Saudi Arabia has no bar association. Instead, international law firms who want to operate in the kingdom are required to partner with a Saudi lawyer to ensure they have adequate knowledge of the country's laws.

But a dearth of qualified candidates makes it difficult to enter the market, which is booming on the back of soaring oil prices.

Energy, infrastructure and capital markets have been the biggest growth areas in recent years, with the 2003 capital markets law, which requires all companies to seek legal counsel before offering shares to the public, being the single largest factor behind the rise in demand.

"One of the things that I have noticed... is, once you go through a major capital markets deal with a client, they realise the added value a lawyer provides, and then they start using you on their other work," Al-Sheikh says.

Saudi investors are also being influenced by their Western counterparts.

"Foreign investors are used to not moving an inch without their lawyer by their side. So the Saudi party, just to feel on an equal footing, goes out and hires a lawyer to represent them."

While few international law firms would even have considered moving into Saudi Arabia five or six years ago, most of the major players are now scrambling to find a partner who will allow them to gain a foothold in the kingdom.

The situation has led to calls for the system to be reformed to allow greater competition.

"I know it sounds a bit bizarre, it's in my interest that it doesn't change. But given what we're seeing in the market I actually hope it does," Al-Sheikh says.

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