Market overview

Less directly dependent on oil and gas than its neighbours, Dubai continues to assert itself as a global business, leisure, travel and tourism hub. However, the emirate is beginning to feel a trickle-down effect from the lower price of oil, since so much of the business that takes place in Dubai is intrinsically linked to its oil-dependent neighbours. Compounding this, Dubai’s tourism sector appears to be suffering, primarily due to the recent volatility of the currency markets. With the dirham pegged to the US dollar, Dubai has become an increasingly expensive destination for UK and Russian tourists, who have in recent times been among the United Arab Emirates’ keenest patrons. Moreover, although security throughout the GCC region remains sound, surrounding conflicts which intensified in 2016 have fuelled an impression of the Middle East as an increasingly risky destination for global tourists. Anecdotal evidence suggests that the tourism sector in Dubai is beginning to feel the strain.  The two largest UAE airlines – Emirates and Etihad – made sweeping job cuts at the end of what proved to be a challenging year for both. This came amid growing concerns that the United Arab Emirates’ position as a flight hub may begin to suffer from the growing number of ultra-long-haul flights on offer, which will no longer require refuelling layovers in Dubai and Abu Dhabi. 

While Dubai may be facing challenges, the emirate has never been short of bullish enthusiasm in the face of adversity – or supreme confidence in its future development. As such, preparations for the 2020 World Expo continue to dominate construction plans. 

Abu Dhabi experienced an exodus of sorts in 2015 and 2016, as a number of international law firms closed doors and pulled out of a market which has typically proved more challenging than its emirate neighbour. Fielding locally based teams to service Abu Dhabi clients ultimately proved too costly and unnecessary for a clutch of firms, which found limited opportunities for further business development in such a small market. However, Abu Dhabi remains important to a small group of firms which typically rely on strong government links for a steady flow of work. Several remaining international outfits are even consolidating operations and increasing headcount in the emirate.

Compensation and human resources

Associate compensation trends (Dubai)

Pressure on salaries for both fee-earners and support staff has lessened in recent years. Although accurate cost-of-living statistics are hard to come by in Dubai, participants tend to agree that the primary living expense – rent – has levelled off in recent years and that average rental prices have even decreased during the past year or so.  This factor, combined with a fairly flat lateral recruitment market, has relieved pressure on firms to increase salaries.  Most law firms surveyed rolled fee-earners through established internal lockstep salary bands during the past year, but changes to established lockstep bands were fairly limited – although several firms indicated that more significant changes were likely during 2017.  However, most firms suggested that they will continue to make minor adjustments to bands at certain levels where they feel out of step with the market, based on the results of surveys such as this. Of late, the Dubai legal services market has seen an influx of US firms paying Wall Street-level associate salaries far above what their highest-paying UK counterparts can offer. 

Comparing the 2017 survey submissions with those of 2016 yielded the following results for Dubai:

  • Percentage of firms surveyed in which average like-for-like associate pay by seniority increased: 62%
  • Percentage of firms surveyed in which average like-for-like associate pay by seniority decreased: 38%
  • Average overall net percentage change in like-for-like associate compensation levels: +2%

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 Dubai during the first 10 years of practice is 8%.

Headcount growth trends (Dubai)

  • Percentage of firms surveyed that increased total headcount during the past year: 54%
  • Percentage of firms surveyed that increased fee-earner headcount during the past year: 38%
  • Percentage of firms surveyed that increased support staff headcount during the past year: 62%
  • Median net percentage change in total headcount (among all firms): +2%
  • Median net percentage change in fee-earner headcount (among all firms): -2%
  • Median net percentage change in support staff headcount (among all firms): +5%

Billing

Based on the latest Dubai survey, like-for-like average hourly billing rates among associates of the same level of seniority at the firms surveyed tended to increase slightly, by an average of nearly 3% 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.

  • Average hourly billing rate recorded internally last financial year (Dubai): AED2,026
  • Average hourly billing rate billed to clients last financial year (Dubai): AED1,771
  • Average total work hour target for associates (Dubai): 1,734
  • Average billable hour target for associates (Dubai): 1,541
  • Average number of billable hours clocked by associates during last financial year (Dubai): 1,291

The above article contains extracts from the Gulf Cooperation Council 2017 Legal Market Intelligence reportThe full version of this report contains further data, including detailed compensation, benefit and billing rate benchmarking tables for all levels of fee-earners and business support staff.  For further details and pricing contact Gwilym Davies at gdavies@GlobeBMG.com or on +44 (0) 20 7940 6858.