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December 7, 2009 5:35 PM

Law Firm Layoffs Now Riding the Dubai Debt Wave

Posted by Brian Baxter

It didn't take long for the Dubai debt crisis to affect Am Law 100 payrolls.

Legal Week in London reports that in response to the continued deterioration in the Middle East's markets, DLA Piper has decided to lay off 9 percent of its staff in the region. The cuts mark the firm's third such move in the past few months.

In April, DLA laid off eight associates in Dubai and placed an additional 20 percent of the office's lawyers on six-month sabbaticals or secondments with no guarantee that they would have jobs when they returned. In June the firm terminated 22 staff members and nine lawyers, including one partner, Legal Week reported at the time.

The latest cuts equate to seven lawyers and ten support staffers losing their jobs, Legal Week reports. The decision follows a review conducted by the firm of its operations in Abu Dhabi, Dubai, Doha, and Muscat. The firm also has alliances with firms in Saudi Arabia and Kuwait.

DLA did not provide Legal Week with a specific breakdown of the individuals affected by the cutbacks, but the firm did disclose that the majority of the layoffs were from the firm's construction, real estate, project finance, and development projects practices. DLA is not one of the firms that have reportedly nabbed Dubai debt advisory roles so far.

The financial crunch is not a recent phenomenon in Dubai, which like most other world markets started to feel the effects of the economic downturn late last year after the collapse of Lehman Brothers.

But with the corporate arms of the Islamic emirate facing looming debt payments--a Monday conference call has been scheduled for a bondholder group and their lawyers from Ashurst--the crisis has ratcheted to a new level. Dubai has further unnerved anxious investors by ring-fencing its prized assets from the debt restructuring of Dubai World, which manages and supervises a portfolio of businesses for the Dubai government.

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