If anyone deserves to put their feet up, it has to be Dr Habib Al Mulla. Over the course of nearly 30 years, he has built his law firm, Habib Al Mulla, into one of the finest, most sought-after and successful in the Gulf. No case too difficult, no challenge too great and no shortage of high-profile victories.
Smart, sharp and shrewd, the UAE’s top legal eagle was also the architect of the legal framework establishing the Dubai International Financial Centre, and was the founding chairman of the DFSA.
So, time to relax? “Oh no, no! That’s not me, no way. If anything, I am about to become far more aggressively involved in this business,” he says.
That is good news not just for the legal profession but for his newly found partners: last week Dr Al Mulla completed an impressive deal that will, from 1 July, see his firm merge with global giant Baker & McKenzie. The new entity, Baker & McKenzie Habib Al Mulla, has high hopes of carving out a huge extra chunk of business in the region, especially in Dubai.
And you can see why: Baker & McKenzie has more than 4,000 lawyers and 72 offices in 45 countries, raking in $2.313bn in the year to 30 June 2012. Al Mulla’s team is just 40 lawyers strong, but is amongst the most specialised and respected in the Arab world. Dispute resolution, corporate and commercial law, banking, real estate and construction have all been part of the Habib Al Mulla DNA over the last three decades.
Put the two together, and the mix of international access and scale with local expertise looks like a win-win situation.
“When you look at the Gulf today, it is experiencing a phenomenal growth and we expect that growth to continue. This needs the kind of legal services we can offer after the merger, with international ability and local knowledge,” says Dr Al Mulla.
He adds: “We have been working with Baker & McKenzie for quite a few years now and we thought that with everything going on in Dubai, with Dubai coming back, it is a good opportunity to bring these two companies’ clients together under one roof with single accountability. It has been a very thorough decision but at the end of the day I think this merger brings far more advantages than some of the independence I may lose. And our clients, they are the ones who really will benefit.”
Baker & McKenzie has already been active in the Gulf and MENA region of over 30 years, beginning with an office in Riyadh in 1979. With offices also in Cairo, Bahrain, Abu Dhabi, Istanbul, Doha and Casablanca, the company has notched up 30 partners and 130 associates across the region.
But the obvious missing link has always been Dubai. Eduardo Leite, chairman of Baker & McKenzie’s Executive Committee, tells Arabian Business that Dubai has long been on the radar.
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“We have had Dubai in mind for many years, especially after we opened in Abu Dhabi (in 2009). Our strategy is always driven by the clients and the clients told us they needed us in Dubai. What we didn’t have was the talent, and that is the most important thing we offer — its people. We found that talent in Dr Habib Al Mulla and his team.”
He adds: “Dubai is a hub for the region in so many different ways. We need to be here in a big way and we are here now.”
Both men are also keen to stress that there will be no job cuts, and Dr Al Mulla has signed up for the long term, taking on the role of chairman of the new entity.
“The point here is not to save costs but provide a wider regional service to our clients. Anyone can do savings,” says Dr Al Mulla.
Leite adds: “Our firms over the last couple of years have done similar operations; in this region we opened up Istanbul two years ago where we merged with [a] local firm. We also did this in Casablanca and Johannesburg. What we have seen after those mergers is a need for more people, not less. We are confident we will see the same here.”
Despite Dr Al Mulla’s commitment to the new set-up, both sides know that the history of mergers is littered with founders leaving soon after. However, Leite is keen to stress that there is no chance of that happening this time.
He explains: “We have a very flat structure. We respect the cultural differences and we allow our leaders in each jurisdiction to show us the way, we don’t control from the top. The responsibility for day-to-day operation and strategic thinking comes from the local leadership. That is the Baker & McKenzie model; it is about sharing the same vision and moving together. We hope Dr Habib Al Mulla will be much more involved in growing in the Gulf as a whole.”
It’s clearly a strategy that’s working. The $2.313bn revenues recorded to June 2012 were a 2.1 percent rise on the previous year, enough to make Baker & McKenzie the world’s largest law firm by turnover, moving ahead of DLA Piper and Skadden, Arps, Slate, Meagher & Flom.
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However, it was Latin America — in particular Brazil — that accounted for double-digit growth, with single-digit growth in Asia Pacific, with the Middle East remaining flat. Both sides are hopeful that the merger — coupled with the huge economic growth in the region — will soon result in double-digit growth here.
While Dr Al Mulla and his new partners put the finishing touches to the merger before it becomes active, both sides also know that the recent upturn in the economy will not only bring great opportunities, but from a legal point of view, concerns. No one has any doubt that the recession is over and the boom is back. Last weekend thousands of people queued for days to get their hands on less than 200 new villas put on the market by Emaar, many of which were flipped the following day.
Dr Al Mulla has long been one of the greatest advocates for reform in many areas of the legal system, and he admits that a lot still needs to be done. Is he concerned that both the current boom — and the lack of legal infrastructure — are getting out of control?
“We have seen two phases. The phase of growth and the phase of slowdown. Unfortunately in both cases we have not dealt with the situation properly. During the boom no one cared to look at the legislation we have put in place, and in the slowdown people were concerned with other things. My fear is, again, that we are seeing this level of growth and not enough attention is being paid to the legal infrastructure. We need to fill in gaps; we don’t have a proper insolvency law or capital markets law — there are many gaps to fill,” he says.
The biggest fear is of course focused on property, with prices rising rapidly, speculators back in town and no clear protection for end users. Dr Al Mulla says: “In property there is no framework to protect the consumers. We need a proper, strong real estate law in Dubai and in the UAE.”
But wasn't RERA meant to do all this?
“Until now we have not seen anything tangible come out of RERA. I think they are well behind and they need to speed up.”
The most vivid example is last year’s row between Nakheel and its tenants on The Palm Jumeirah. Thousands were banned from using the development’s beaches, with the developer claiming it was within its rights to do so over unpaid service fees — despite the fact that most of those banned were tenants who are not responsible for service fees.
At the time, UAE business legend Khalaf Al Habtoor told Arabian Business: “It was 100 percent [damaging] and unacceptable. If I am buying a house and using the beach and later told I have to pay for the beach, this is abnormal. This is damaging the reputation of my country.”
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Habtoor added: “I am 100 percent sure that the higher authorities were not aware of such a thing because they would not have accepted it... They would never have [agreed to] it but some people try to show they are making money for the government — they are damaging its reputation two million times [over] for a few dirhams.”
Dr Al Mulla says Habtoor’s comments are “strong” but admits there are “concerns” — however, he says the wider issue needs to be examined, and is again a problem that needs to be laid at RERA’s door.
“There has been a legal vacuum so developers have filled in the gaps with contractual arrangements. Because there was no legal framework these contractual arrangements were made, so maybe they [Nakheel] have been contractually right to do so. But this is where RERA has to step in and say ‘even though you have contractual rights, there are also consumer rights’.”
Another area that Dr Al Mulla has been vocal on in the past is the UAE laws on bounced cheques, which is seen as a criminal offence and often leads to imprisonment. He has in the past called for the offence to be decriminalised, and though he is hopeful that will one day happen, he doesn’t expect it any time soon.
“One of the issues that is delaying this is that there are certain economical lobbying groups behind continuing this practice. Look at banks, credit card issuers and car financing agencies. Their main protection is the cheque guarantee, and so they are lobbying against this. But the market has to adjust itself.
You cannot put people behind bars [for bouncing cheques].
“Banks are using the police as debt collectors, but even the police don’t want to do this, though until the law is changed, they can’t change this.”
The issue of bounced cheques is one of a number of parts of financial laws that, he argues, need to be carefully examined. There is no shortage of high profile businessmen — some of whom he has successfully defended — that have spent months languishing in jail over what are essentially business disputes.
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“The issue is the current criminal code does not properly fit for business crimes. It was drafted at a time when everyone was looking at crimes such as murder, theft and rape. But when it comes to sophisticated financial transactions there needs to be a separate code to deal with these cases because sometimes there is a very fine line between what constitutes a crime and what is a commercial transaction [that’s gone wrong]."
Also in Dr Al Mulla’s focus in the past has been the DIFC. As founding chairman of the DFSA, he has never held back in his criticism of the hub he created, suggesting it had completely lost its focus. Three years ago, he told Arabian Business: “The Dubai International Financial Centre is more of a shopping centre and more of a real estate project [than a financial centre]. They need to get back on track to the initial goals of the DIFC. There was a clear vision with the first blueprint for the DIFC. [However] it has moved away from the path we set out on, which was to build a financial centre with high standards, to attract the 500 top companies in the region, to become a hub for doing business for the whole region. That initial direction, particularly when it comes to the exchange, but also the DIFC as a whole, has been lost.”
Much has changed since then. Does he think all the DIFC’s problems have been overcome?
“I think things have improved in [the] past few years; there has been more focus but it is still far from the original plan. It needs to attract more of its core business which are financial institutions, and be a financial hub for the region. That is the main message that DIFC should always have been focused on.”
Focus is one thing Dr Al Mulla has never been short of. Over the last three decades, the Harvard and Cambridge graduate — who by his own admission “never really wanted to be a lawyer” — has risen to some of the most prominent positions in both the private and public sector.
His first high-profile case was in 2000, when he defended the 21-year-old British national Lee Ashurst, who was accused of hacking into Etisalat and crippling the UAE’s internet system. “It was seen as a sabotage crime, and I was against public opinion. In the end, he got a AED5,000 fine — I would consider that a victory,” he says.
Many more big cases have followed, most notably his defence of Sheikh Issa Bin Zayed Al Nahyan, the brother of UAE president and Abu Dhabi emir HH Sheikh Khalifa Bin Zayed Al Nahyan. Sheikh Issa was accused of torture, and alleged video evidence against him was seen around the world, sparking global criticism. But Dr Al Mulla, who won the case, says he had no second thoughts about taking on the case.
“I saw it more as a call of duty. I was approached and asked to deal with something that was affecting the UAE image. It was difficult because again you had the whole public opinion against you and you had to explain there is a different version. I like cases with a challenge. Winning a difficult case is a good feeling. If I am convinced of a case I will take it regardless of what the public think.”
That can only be good news not just for the profession, but the newly formed Baker & McKenzie Habib Al Mulla.
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