Russell Baker, who founded the firm in Chicago in 1949, consciously positioned Baker & McKenzie to play a global role, opening offices around the world to capitalise on the needs of the multinational corporations that emerged after World War II. Despite its origins in the US, Baker & McKenzie insists that it should be regarded not as an American firm, ‘rather one with an international and integrated culture’.
The firm now has 605 partners worldwide, backed by 3,151 qualified lawyers and a total of nearly 4,200 legal professionals. Every partner in the firm attends the annual general meeting – presided over by chairman Christine Lagarde – and more frequent consultations are held through regional councils and global practise groups. The integrated approach has been evident in the Saudi telecoms project, on which two Riyadh-based attorneys have been supported by three colleagues in London and one from the telecoms team in Frankfurt.
In the Middle East, the primary focus for Baker & McKenzie was, and continues to be, Saudi Arabia. The firm first investigated the possibility of setting up in Riyadh in the mid 1970s, and the office was inaugurated in 1979. ‘We didn’t want to set up in the Middle East as a post office,’ says John Xefos, the senior partner in Riyadh. ‘We were looking for people who would commit for the long term.’
Xefos himself is a good example. Having graduated from Cornell University, he laid the foundations for his future career by becoming one of the first students on a joint programme of Middle East studies and Islamic law at the law school of the University of Pennsylvania. He joined the Baker & McKenzie Middle East group in 1980, and has resided on a full-time basis in Riyadh since 1983. George Sayen, who has been with the firm in Riyadh since 1988, is also a graduate of the joint programme at Pennsylvania. Sayen, a fluent Arabic speaker, works across a wide range of issues including joint venture agreements, government contract, labour, litigation and banking matters. Another long-term member of the team is Ian Siddell who joined the practise in 1996 and concentrates on banking and finance matters.
‘We consider ourselves to be the only firm that has consistently demonstrated its commitment to a long-term presence in Saudi Arabia and the region,’ says Xefos. Taher Helmy, one of the founders of the Riyadh office, moved to Cairo in the mid 1980s to take charge of the new Baker & McKenzie office in Egypt. The firm has been closely involved in a series of initiatives in Egypt over the past decade as the government has sought to open up the economy to private investment. In 1999, Baker & McKenzie expanded its presence in the Gulf through opening an office in Bahrain.
The firm does not have any plans to open more offices in the region, handling its business in other Gulf states mainly from the London office. Some international legal firms have used Dubai as a regional base, but Baker & McKenzie is emphatic on the need for a direct presence in Saudi Arabia. ‘The action really is in Saudi Arabia, and you need to have a strong team in Riyadh,’ says Xefos. ‘I don’t think you can park people in Dubai and have them make periodic visits to Riyadh. You need to be on the ground regularly seeing ministers, officials and corporate clients to have a feel for what is happening day-to-day.’
That regular contact with officials was an important ingredient in the success Baker & McKenzie had in being selected to advise on the telecoms sector restructuring. That process is now entering a new phase as Saudi Telecom Company (STC) prepares for an initial public offering (IPO) of a part of its capital.
The major structural changes taking place in the Saudi economy provide opportunities for specialist advisers on both sides of the fence. Advising the government entails long-term involvement in a particular sector, but inhibits the adviser from working with companies carrying out new projects in that sector. ‘We do think strategically about whether to focus on government advisory work or on working with corporates,’ says Xefos. ‘We look 15-20 years ahead.’ In the electricity sector in Saudi Arabia, Baker & McKenzie has concentrated on the corporate side. White & Case, one of the handful of other international firms with a long-term presence in Saudi Arabia, has been most prominent on the government advisory side in this sector.
Baker & McKenzie is acting with the prospective lead developer of the kingdom’s first private power project, entailing the construction and operation of a co-generation plant for Saudi Petrochemical Company (Sadaf). The firm has also acted for the lenders in connection with the Ghazlan power station project in the Eastern Province. One of the firm’s most sensitive jobs at present is its role as adviser to one of the core venture groups of international oil companies in the Saudi gas initiative, including working on various aspects of integrated energy projects. Xefos says the firm has had to be careful to define where there might be conflict between its central role in one of the core ventures in the gas initiative and its ability to work with contractors on elements of the other two core ventures.
Baker & McKenzie has also built up a strong portfolio of advisory work in the petrochemicals sector. This includes work on the Saudi International Petrochemical Company maleic anhydride/butanediol project and the Saudi Chevron Petrochemical Company benzene and cyclohexane plant.
Xefos is at pains to emphasise that the firm’s activities extend beyond working on major projects. ‘We have been doing a lot of work with the new generation of Saudi entrepreneurs, particularly in the IT sector,’ he says.
One of the advantages of the firm’s long residence in Riyadh is the understanding it has built up of the subtleties of the application of the various strands of commercial and Islamic law in Saudi Arabia. Patterns of litigation and arbitration are still evolving in the region, and Xefos says he advises clients not to pin too much hope on the supposed protection given by placing a project agreement in the framework of English law. ‘The reality is that it is not easy to enforce a ruling made under English law,’ he says. ‘There is no track record of enforcing foreign arbitration, despite the fact that Saudi Arabia is a signatory to the New York Convention.’
One of Xefos’ main ambitions for the future is to see Saudi attorneys playing an increasingly prominent role in the firm. ‘At present, the Western lawyers tend to do most of the drafting of documentation and negotiation of detailed agreements,’ he says. ‘We need to get to the point where young Saudi lawyers go through the same type of training as their Western counterparts, climb up the ladder, prove themselves and over time take charge, based on their achievement. I would like to see a large practise in which there is no dividing line between the Saudi lawyer and the Western lawyer, and their respective roles. This has already happened in the banking sector, with both Saudi men and women coming through and taking more responsibility. I am sure it can also happen in our profession.’
Such an ambition is wholly in keeping with the original aspiration of Russell Baker to establish a truly global firm.