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An increase in commercial transactions is leading to heightened demand for quality legal advice
Mayank Singh

While none of us would like to cross their paths and most would wish to stay away from them if possible, the truth is that they are an integral part of any modern day business transaction. Yes, we are talking about lawyers and the gro-wing need for them in an economy like that of Oman. As the sultanate’s economy gallops ahead, there is an increasing need for legal advice, both from individuals and companies. Lawyers and legal firms have become an indispensable support system for corporate Oman. Says Mansoor J Malik, managing partner, Al Alawi, Mansoor Jamal & Company, “The number of legal firms has grown rapidly over the years. When we started our firm in 1986, there were just a handful of legal firms but now there are over 150 firms and several practising lawyers. This is largely because sophisticated corporate houses increasingly need legal services.”

While the number of firms may have jumped significantly, there is scope for many more quality legal firms in Oman. With a number of big ticket infrastructure projects taking off in Sohar, Sur and Salalah, most companies need to take legal advice while entering into partnerships or signing any deal. Says Sean Angle, partner, Trowers & Hamlins, “There is a greater awareness about compliance issues and corporate governance issues which has resulted in a huge increase in the level of work for legal firms.”

The sentiments are echoed by Alasdair Jeffrey, solicitor and notary public, Al Alawi, Mansoor Jamal & Company. “If you go to any developed country like the US or UK, the first person you get to when you set up a business is a lawyer to address all your legal and commercial issues. A lawyer is the first port of call there and this is now becoming the case in Oman.”

A reflection of this can be seen in the growth the law firms in Oman have been going through. Trowers & Hamlins has grown at a phenomenal 300 per cent over the last five years and is poised for further growth. The firm, which has a staff strength of 40 (lawyers and supporting staff), is looking at recruiting more people soon. Al Alawi, Mansoor Jamal & Company has a similar story to tell. The firm has been growing at 50 per cent per annum. Its strength has grown from 25 members five years back to a 50-member strong team.

As the demand for lawyers increases, there is also a growing awareness amongst clients that quality legal advice comes at a price. Says Angle, “There is a greater awareness and willingness to pay for quality advice.”

Concepts like retainerships are also taking hold. Retainerships mean that a company engages a lawyer or a firm as its chosen legal counsel. The counsel would then be paid a fixed sum either monthly or annually for work. Al Alawi, Mansoor Jamal & Company today boasts of 30 retainer clients, which include some of the biggest banks and companies. “Retainership ensures that a company gets retained legal counsel of choice and guarantees that a firm will not take up work against it. It also helps in cases where the clients (like banks) need snap advice,” says Jeffrey.

Despite its advantages, there are others who have reservations about the concept. Says Angle, “While many companies ask for retai-nerships, I do not think that it is to their advantage. A number of companies do not give a defined volume of work and so feel cheated. The better approach is to think carefully and approach firms to do work in a defined way. That way, they get better value for money as most legal firms charge for the time. The industry needs to model itself as a service based industry.” To each his own – at the end of the day it is how a law firm positions itself.

While there are several internationally reputed firms that do some work in Oman, firms that have a local presence reckon that they service clients better. “There would be a difference in quality at a large firm which assigns a case to a team of junior lawyers and a firm like ours where a client would get partner level attention,” says Angle. Being a relationship-based business, firms which have a presence in Oman have a definite edge over large firms based abroad.

Realising their disadvantage, foreign firms which are keen to get into Oman often underbid local firms in commercial transactions. Says Jeffrey, “Local firms do bid against each other but more often it is an international firm that wants to get a foothold in Oman which und-erbids local firms.”

So while the market may not be as competitive as that in Dubai, there is no scope for complacency. Says Angle, “We give clients the best value for money. At our firm, the tolerance for non-delivery is nil or very low.”

While all legal firms are into both litigation and commercial law (project financing), for most of them commercial law makes up a lar-ger quantum of work. For example, at Al Alawi, Mansoor Jamal & Company, corporate commercial law makes up 70 per cent of cases handled, with litigation accounting for the remaining 30 per cent. The same holds true for Trowers & Hamlins. “Litigation makes up a third of our work while two thirds of it is made up of corporate commercial law .”

The evolution
The legal system in Oman has been through a cycle of evolution through the years. “Any legal system evolves over time and that in Oman has evolved over the last 35 years. It has been an incredible achievement as to what the country has achieved. It now has a sophistica-ted and constitutionally sound legal system,” says Angle.

Looking back, experts reckon that the privatisation of the electricity sector from 1993 proved to be a watershed for legal firms. “The privatisation of power plants proved to be a turning point in Oman,” says Malik.

The government had to make changes to allow foreign firms to take a stake in local firms. Thus foreign firms were allowed to take a 51 per cent majority stake in power projects. Al Kamil Power and Barka Power were set up as a result of such changes. The upper limit on foreign ownership was later increased to 65 per cent and then to 70 per cent. The process marked an important first as companies inte-rested in taking a stake in the electricity sector needed legal advice.

The privatisation of the power sector was followed by the large-scale projects for water desalinisation and privatisation of solid waste, changing the legal matrix completely. Says Jeffrey, “Until the mid 90s, the effort was to fit a commercial transaction into the law, but with the advent of large international partnerships, laws started being applied to transactions.”

The law in Oman, as it stands is now, is considered to be amongst the most advanced and sophisticated in the region. Oman’s laws regarding foreign investment regime, corporate governance and the regulatory regime in stock markets are based on international best practices.

The recently passed property law, which allows expatriates to own real estate in tourism designated areas in Oman, is being hailed as a model for other countries in the Middle East to emulate. The commercial law in Oman comes from French and Egyptian law.

“Since a lot of commercial work to be done in the sultanate is in English and a lot of contracts between foreign companies and Omani companies are governed by the English law, lawyers trained in the UK are able to work on them,” says Jeffrey. Thus Al Alawi, Mansoor Jamal & Company has a mix of commercial lawyers from the UK and litigation lawyers from Sudan, Egypt and Oman. The firm has seven Omanis and is looking at recruiting two Omanis every year.

To practice law in Oman, a firm or a lawyer needs to be licensed with the Ministry of Justice. Expatriate lawyers need to have at least ten years of experience to get a licence from the Ministry of Justice. The judicial system is a three-tiered one with primary courts, higher courts and the supreme court.

While the legal profession has come a long way in Oman, experts reckon that there is scope for more good lawyers. “In Oman there is a need for good lawyers. If you are good, there will definitely be work for you,” says Malik. Coming from one of the leading lights of the legal profession, this should be music to the ears of aspiring lawyers. The profession thus has a lot of potential to be a good source of employment for students in future.

With Oman being a signatory to WTO rules, the impending Free Trade Agreement with the US and several multi-million dollar infrastructure and tourism projects underway, the growth the legal firms have witnessed so far may be just the tip of the iceberg.