The below article contains extracts from the Lexology Insights 2019 Gulf Cooperation Council law firm compensation, benefits and billing report. The full report contains compensation, benefit and billing benchmarking data for all levels of fee-earners and business support staff.
Legal market trends and conditions – Saudi Arabia (Riyadh)
Saudi Arabia continues to present law firms with the most dynamic market in the region. Despite the international outrage over the apparently state-approved killing of Washington Post journalist Jamal Khashoggi, there seems to be little slowdown in inbound interest surrounding the various colossal infrastructure projects forming part of the country’s Vision 2030 programme. Chief among these are the futuristic cross-border tourist city of Neom, which is set to share marine land with Egypt and Jordan, and a 50-island Red Sea luxury holiday resort intended to rival Dubai’s hegemony of international tourism in the region. Many of these projects are now entering the pitching stage for legal services, which marks Saudi Arabia as a bustling hub of opportunity for international law firms. As ever, the limiting factor for most of these firms is not the work available, but the regulatory barriers to getting boots on the ground – be they foreign or domestic. The process of acquiring work visas (iqama) is typically long and arduous; while the hiring and retention of local talent presents its own issues, with suitably skilled business services staff and lawyers in short supply and high demand.
Compensation trends – Saudi Arabia (Riyadh)
Provided that associates meet performance targets, they will typically advance up a seniority level in lockstep compensation grids annually. The average annual salary increase for an associate advancing up a level on a lockstep grid in Saudi Arabia during the first 10 years of practice is 13%.
Comparing the overall 2019 survey results with those of 2018 yielded the following results for Saudi Arabia:
- Average net percentage change in like-for-like junior (0 to 3 PQE) associate compensation levels: -5.7%
- Average net percentage change in like-for-like mid-level (3 to 7 PQE) associate compensation levels: -1.0%
- Average net percentage change in like-for-like senior (7+ PQE) associate compensation levels: +5.5%
- Average overall net percentage change in like-for-like associate compensation levels: +0.1%
Average associate compensation figures in Saudi Arabia remain higher than those in neighbouring countries, and typically stand around 13% higher than those for comparable positions in Dubai. The difference is more pronounced at senior associate level (27% higher than Dubai), while junior associate compensation levels in Saudi Arabia tend to be lower than in Dubai.
Headcount growth – Saudi Arabia (Riyadh)
- Mean annual headcount turnover: 18%
- Percentage of firms surveyed that increased fee-earner headcount during the past year: 50%
- Mean percentage growth in fee-earner headcount (among firms that grew): 22%
- Mean net percentage change in fee-earner headcount (among all firms): +10%
- Median net percentage change in fee-earner headcount (among all firms): +4%
- Mean annual headcount turnover: 20%
- Percentage of firms surveyed that increased support staff headcount during the past year: 30%
- Mean percentage growth in support staff headcount (among firms that grew): 26%
- Mean net percentage change in support staff headcount (among all firms): +2%
- Median net percentage change in support staff headcount (among all firms): 0%
Billing trends – Saudi Arabia (Riyadh)
Based on the latest Saudi Arabia survey, like-for-like average standard hourly billing rates among associates of the same level at the firms surveyed tended to increase by 11% over the past year. It remains fairly standard for individual associates’ billing rates to increase annually, based on increasing seniority. The average annual step increase is 5% during the first nine years of fully qualified professional practice.