During our usual scan of business of law stories on Monday morning, we found ourselves scratching our heads over what Clifford Chance is doing in Saudi Arabia, and to our delight the business of law fairies provided some clarity, starting with a magical 7:43 a.m. email gift.

Indeed, the Magic Circle law firm (what’s the magic circle you ask? listen to our Brexit podcast with our man in London, Jeremy Hodges of Bloomberg News) announced that it has entered into an association with the newly established Abuhumed Alsheikh Alhagbani Law Firm (AS&H) in Saudi Arabia.

The association will replace the stand-alone Clifford Chance law firm that was licensed in 2013 by the Saudi Ministry of Commerce and Investment, according to the firm’s press release.

Asked whether this replacement meant there would be any layoffs, Sonia Malhotra, a firm spokeswoman provided full assurance that everyone in Saudi Arabia would remain employed, although there will be some shifting around.

“The Saudi lawyers and Business Services staff will transition to AS&H while our foreign lawyers will remain employees of Clifford Chance and be seconded to AS&H,” she wrote in an email. “The current Clifford Chance partners will also remain Clifford Chance partners and not become partners of AS&H.”

Altogether, six partners will practice in Riyadh under the association. Two existing Clifford Chance associates will be promoted to partner and move over to AS&H: Majid Al-Sheikh and Mansoor Al-Hagbani, while the firm is bringing onboard Dr. Fahad Abuhumed,  a former deputy minister at the Ministry of Commerce and Investment. Three other existing Clifford Chance partners will remain with Clifford Chance.

One might ask, why did Clifford Chance decide to swap its own presence in Saudi Arabia for a local association — a looser affiliation and another step removed from its own lawyers being staffed on the ground?

To provide some context, the association comes after Clifford Chance has faced resistance to its license to practice law in Saudi Arabia from local courts and an appeal from a Saudi lawyer who called its license into question. [Other big law firms in Saudi Arabia are known to practice there through associations, such as Allen & Overy through its relationship with Riyadh-based Khoshaim & Associates, and Jones Day through Ebrahim Alhabardi Law Office.]

According to a January article from Legal Week: “Current licensing conditions include the provision that foreign firms own only up to 75% of a local firm while a Saudi national with a license to practice law must own the remaining 25%.”

The case over Clifford Chance’s Saudi law license is still ongoing, but Claire Gosnell, another spokeswoman for Clifford Chance said that “the real impetus” behind the association is that it will broaden the firm’s services in Saudi Arabia to meet client demand, especially for a project set to revamp much of Saudi Arabia’s public transportation and infrastructure.

“It’s quite a dynamic time in the region,” said Gosnell.

Gosnell declined to share any financial terms of Clifford Chance’s relationship with the association, other than to say the two firms are exclusive partners working on all Saudi legal matters together.

The association provides advice in many areas including M&A, finance, equity and debt capital markets, antitrust, financial services, real estate and construction and regulatory and dispute resolution.

The release also listed other matters Clifford Chance has advised on since establishing itself in Saudi Arabia in 2013.

Since 2013, Clifford Chance has advised on major mandates such as the establishment of the Saudi Telecom Company’s SAR $5 billion sukuk issuance programme; the US $10 billion revolving credit facility for Saudi Aramco; and, the Public Investment Fund’s acquisition of a US $1.3 billion stake in Korea’s POSCO E&C. Clifford Chance has also invested in recruiting and developing both Saudi legal talent and internationally qualified foreign lawyers based permanently in Riyadh.

Source: bol.bna.com