It doesn’t take an expert to see how quickly AI and emerging technology is changing the way the world functions, but for the legal professionals helping businesses navigate this landscape of ever-growing complexity, exactly how valuable is your experience in the current marketplace, and what does the future hold for you?
Having started my professional journey working in the tech sector as a software developer before embarking on a career in legal recruitment, I was keen to dive into how hiring trends at law firms are changing as we move through a rapidly evolving digital age. I will touch upon how demand for associate talent in the Middle East has increased in recent years and the reasons behind it, as well as what firms are doing to stay ahead of the curve in terms of attracting specialist talent.
M&A, Private Equity, and Project Development and Finance have been the cornerstone of recruitment activity in the private practice sector in the region since the dawn of the legal industry across the Middle East, and to a large extent this remains the case, given the sustained levels of investment activity in areas like traditional financial services and infrastructure development. However, as with any global economy with the same ambitious plans for innovation around digital transformation and diversification, the market is growing more complex by the day, and with it, the demand for specialist talent beyond these mainstream sectors is increasing at a faster rate than expected.
Areas such as investment funds, PE secondaries transactions, leveraged finance, and, of course, AI/digital assets and the regulation of these technologies, are now all gaining traction at an incredibly fast pace. Leading international firms are investing heavily in these practice areas, relocating partners from branches all over the world with the idea of getting a head start on building these specialist teams ahead of the market reaching a point of saturation. With the introduction of these new teams into the local market, alongside established practices that already have the advantage of time spent in the region, the demand for junior to mid-level associate talent is on the rise.
Our Middle East Associate recruitment desk has observed a 150% increase this financial year from FY2024 of fee-earner (non-partner or counsel level) placements made into TMT and financial services regulatory teams across UK and US-headquartered international law firms in the UAE and Saudi Arabia. That’s an unprecedented level of growth, but when we consider that our placements have only made up a portion (approximately 40%) of the total moves at the Associate and Senior Associate level in these sectors this financial year, it’s clear that the market as a whole has been seeing an upward shift in terms of recruitment activity. The total number of lateral hires at this level compared to last year has also increased by approximately 40%.
Digging deeper, it’s not a surprising statistic. The UAE Fintech market value was valued at USD 3.16 billion last year, with projections slated for it to reach USD 5.71 billion by 2029, and start-ups in the Fintech space in the UAE raised USD 265 million in H1 of 2024, approximately one-third of all start-up funding in the country in that same period. Driving this growth is the UAE government’s recent efforts to position the country as an attractive alternative to more traditional financial centres around the world for up-and-coming start-ups in the tech/fintech space. The introduction of new sandbox environments, as well as being removed from the FTAF’s grey list last year were significant milestones in this regard, and the subsequent growth is evident.
Shifting to the KSA, the number of Fintech businesses set up in the Kingdom has more than doubled since 2021. Following the Trump administration’s recent visit to Riyadh earlier this year, American tech companies including semi-conductor giants AMD and Nvidia have pledged to make investments of upwards of USD 10 billion and to share proprietary technology with the new PIF-backed AI business venture, Humain, in its efforts to build massive AI infrastructure factories across the KSA over the course of the next five years.
If these plans and figures materialise, it’s safe to say that we’re going to see a similar upward trend in private practice hiring next year and beyond.
From the placements we’ve made this year, there’s no question that we have observed more instances of candidates in these sectors being offered financial premiums over the typical market rate at their level. This includes circa 10% premiums on base salaries and, in some cases, sign-on bonuses, historically a very rare occurrence in the middle market. In addition to this, firms are offering secondment opportunities to blue-chip institutional clients, and excellent support towards allowing associates to build their own client relationships and connections.
It’s also worth noting that a considerable number of US firms have been doubling down on their investment into TMT and FS regulatory offerings in the region as a result of client demand. A number of these firms pay in line with the New York Cravath-scale salary bandings – a very persuasive hook which has and will continue to attract top associate talent from the leading UK international firms including the Magic Circle, as well as other transatlantic US players in the market. This is becoming more evident, and in an effort to retain their best performers, firms are moving fast to revisit and revitalise their compensation models.
It’s likely that the market will equalise one way or another over the course of the next three to five years, as it becomes more saturated and the candidate pool grows in size, but if there’s anything we’ve learned, it’s that the lawyers who seize this opportunity to jump-start their careers are usually the next generation of counsels and partners that we end up recruiting associates for!
If you’d like to discuss how these market shifts could impact your career path or how to position yourself to take advantage of them, please don’t hesitate to get in touch with me or our team for a confidential discussion.
