What was a two-year plan turned into an eight-year one, after Barton Hoggard had a taste of working in the United Arab Emirates.
He headed back to New Zealand after a five-year stint in London, only before quickly setting his sights on the Middle East.
“I arrived towards the end of [a] busy time where property prices were skyrocketing and then there was obviously the global financial crisis and things slowed down quite a bit,” Hoggard says of his 2008 arrival in the UAE.
“At that time, property prices halved in value overnight - it was a huge bubble. But Dubai has rebounded since then, [where] prices came back towards the end of 2012.”
The legal world
The UAE legal market is extremely competitive, with more than 75 international firms and a number of local firms in play. It’s so competitive that offices that are struggling will try to undercut other firms on price, just to keep their people busy, he says.
“It isn’t a sustainable business model and it causes issues in the market.
“A number of those offices are like satellite offices, servicing their UK or US headquarters.
“Firms need to be able to distinguish themselves on the quality of the service rather than cost to be able to create a sustainable business model.”
Being the largest international law firm in the region, Clyde & Co is well placed to differentiate itself in the marketplace because it’s the only international firm with a full service offering.
Regulatory changes in the healthcare sector have kept Hoggard busy as a number of companies are looking to consolidate. For small players, compliance requirements have become increasingly more onerous, which is making it more difficult to remain profitable.
“There’s been a significant consolidation of the healthcare market - with a lot of the bigger operators buying the smaller operators who are struggling in a more competitive and highly regulated sector - and because there is a dearth of good healthcare assets for sale, the valuations for the quality healthcare facilities are huge,” Hoggard says.
A land of opportunity
“There are a huge number of exciting projects here,” says Hoggard of his Middle Eastern legal career.
“There’s a lot of opportunity to get involved in very interesting and complex transactions, in particular, in the healthcare, education, development and infrastructure sectors.”
Whereas, there were limited opportunities for cross-border work in New Zealand, he says.
As an emerging market, Dubai attracts companies that are struggling in their home market.
“Foreign companies see the UAE and this region as a great opportunity to expand their business and to build their businesses, which they perhaps can’t do in their home market.
“As a result of that, there’s quite a lot of legal work.
“There [are] a lot of cash rich companies here that are not only looking to invest in the region but also outside of the region.
“You see a lot of situations where UAE, Qatari or Saudi companies are looking to make acquisitions in Europe, the US and even further afield. By way of example, the largest local UAE courier company recently acquired Fastways Couriers in New Zealand.”
The legislative landscape
The legal system in Dubai is quite different to New Zealand’s, he says.
The government authorities do not always follow the black letter of the law, for example.
“As a lawyer practising here, you need to know not only what the law is but also what the current practise is because you won’t be giving clients the most appropriate advice if you are simply citing what the law says.”
The UAE has a number of Free Zones, which is a major attraction for businesses because it means that many tax considerations of other jurisdictions are non-existent there. But each of these zones have their own regulations and understanding the different licensing and regulatory regimes can be difficult.
“We assist companies navigating their way through that,” says Hoggard.
“The attraction of Free Zones is that a foreigner can come in and own 100 per cent of the share capital of a company in a Free Zone, whereas on the mainland you have to have a UAE national registered as the owner of 51 per cent of the share capital.
“It can take a little bit to get your head around the licensing and regulatory regime here.
“[We’re] mostly acting for foreign companies that are looking to do business here, whether that be setting up, joint ventures or acquisitions.”
Slowing oil prices
The low price of oil has caused much privatisation as governments in the region look to slow spending as revenue decreases, despite huge cash reserves.
“Abu Dhabi has huge cash reserves and the second largest sovereign wealth fund in the world,” Hoggard says.
“They are still in a pretty good position but revenue has definitely decreased and as a result of that, they are looking at ways they can reduce their expenditure and privatisation is one of those means.
“They’ve got massive budgets but the oil price has fallen dramatically below USD30 a barrel and, with that, their revenue has decreased.”
But it’s not all about revenue.
“The government here is not only the legislator, but in a number of instances, they’re also the developer and the investor,” Hoggard says.
“[What] they’re wanting to do is transition into simply being the regulator so they are wanting to privatise a number of their functions.”
Iran opening its boarders following the delisting of EU sanctions will have a major impact on the legal market in the region, as companies scramble to infiltrate what was previously an untapped market.
“There are thousands of companies that are wanting to expand or establish businesses in Iran because it’s an untapped market that has been in isolation for four decades. There is a large young and highly educated population in Iran, which represents a massive potential market for foreign companies,” Hoggard says.
“We are receiving a huge number of enquiries about how to acquire companies in Iran or to set up businesses there. At the moment, the main issue is getting cash in and out of Iran through the banking system because a number of banks have, in the past, been hit with millions and billions of dollars of fines for breaching sanctions, and they are a little reluctant to re-engage in facilitating business in Iran because certain sanctions are still in place.”