Saudi Arabia grants first foreign licences to Clifford Chance, Herbert Smith Freehills and Latham & Watkins

Saudi Arabia grants first foreign licences to Clifford Chance, Herbert Smith Freehills and Latham & Watkins

The authorization was given at the International Conference on Justice in Riyadh

Clifford Chance, Herbert Smith Freehills, and Latham & Watkins have become the first foreign law firms to be granted licences to practice in the Kingdom of Saudi Arabia under the new rules.

Earlier, like other international firms, the trio operated in the Kingdom through an association with a local law firm. But following amendments to the Saudi Code of Law Practice, the firms now need a licence granted by the Saudi Arabian Ministry of Justice.

As per the Law Society of England and Wales, the new law encourages firms to set up in Saudi Arabia so that legal work is engineered within the Kingdom. Apart from enabling high-profile deals to stay within the country, it would increase opportunities for local lawyers.

Henceforth, the licensed firms will have to meet certain obligations, including that two partners representing the firm, must live in Saudi Arabia. At least half of its lawyers in the country must be Saudi nationals, though the proportion could rise to 70 percent. Moreover, work related to Saudi law cannot be passed to other offices and no more than 30 percent of fee income can go outside the Kingdom. Also, every five years, the licences would have to be renewed.

The Law Society is expecting the changes to be implemented by June. Thereafter, the associations will no longer be permitted. The firms will have to either structure their operations as a professional company in a joint venture (with registered Saudi lawyers as co-shareholders) or as a branch office of a foreign law firm. Not allowing Saudi law advice, it must 100 percent be held by the parent entity.

After the licences were recently awarded to the three firms at the International Conference on Justice in Riyadh, Clifford Chance announced entering into a 50:50 joint venture with its long-time Saudi associate firm Abuhimed Alsheikh Alhagbani Law Firm (AS&H). Effective 1 May, the JV will be known as AS&H Clifford Chance.

Dr. Fahad Abuhimed, the managing partner at AS&H will be the managing partner, while Guy Norman, who previously led Clifford Chance’s global corporate team, will be the senior partner in the new structure.

Abuhimed commented, “This new joint venture cements the relationship that Clifford Chance and AS&H have enjoyed for the last six years in the Kingdom, and which has created an unrivalled legal powerhouse in Saudi Arabia.”

Meanwhile, Herbert Smith Freehills currently advises clients in Saudi Arabia through an association with The Law Office of Mohammed Altammami. But it would be establishing an office in Riyadh.

Stuart Paterson, the firm's managing partner in the Middle East, said, "This region is strategically important to our clients and the firm. We are very pleased to be one of the first firms to receive a foreign law firm licence in the Kingdom. This enables us to better serve our clients in the region and globally.

Joza Al-Rasheed, previously a partner in The Law Office of Mohammed Altammami, will lead the office.

Latham & Watkins operates in Saudi Arabia in association with The Law Firm of Salman M. Al-Sudairi and Al-Sudairi serves as the managing partner of its office in Riyadh.