DLA Piper has undergone a third round of redundancies in the Middle East, cutting an additional 9% from its regional staff numbers. However, there may be more to come.

The latest cuts will affect seven lawyers and ten support staff from the real estate, construction, project finance, projects and support teams in Dubai. The firm has already downsized twice this year – in April eight Dubai associates from the corporate, finance and projects practices were made redundant and 22 staff members were let go in June. This means the firm has reduced its regional headcount by 39% year on year.

Other measures that the firm has adopted in its restructuring efforts include staff sabbaticals and client secondments. A source said that some staff went on to three-day weeks, with full-time staff taking a 5% pay cut.

Deteriorating market conditions in the Middle East were cited as a reason behind the latest round of redundancies. One of the firm’s key construction clients, Nakheel, has US$6bn in debt to repay and its owner, Dubai World, is itself undergoing a restructuring.

According to a source, the firm’s recruitment strategy over the last year may have been another reason for DLA’s restructuring. “Why, when the market was showing signs of slowing at the end of 2008, did DLA Piper continue on a hiring spree, bringing in more lawyers in 2009?” the source said. “There is a feeling that it’s not a geographical split, but a split between the favourite team and the rest. There was a group of people who came from the same firm who looked after their own, and there’s the rest.”

The latest staff losses may not be the last that will be seen at the firm. “I think there will be more cuts, but I am aware there were redundancies a few weeks ago and it would be interesting if they’ve been included in this [latest round of figures],” said the source.

In the next few months 14 staff members will be transferred to other offices. Next year Dubai office head Tony Holland will leave DLA Piper to take the helm of its Australasian alliance firm, DLA Phillips Fox; current Dubai office partner and head of the litigation and regulatory practice, Jim Delkousis, will take over his position.

Recently appointed Middle East managing partner, Abdul Aziz Al-Yaqout, said that the impact of the redundancies was “deeply regretted.” “We are assisting [people] to manage the transition, whether remaining in the region or returning to their home locations,” he said. “We remain committed to the region and to each of our offices in the six GCC countries and these necessary changes enable us to proceed confidently into 2010.”

DLA is also currently conducting a review of its international partnership model to implement a new compensation and band structure. Meanwhile, a spokesperson from the firm has denied rumours that DLA Phillips Fox will be financially integrated with the international business, although did not rule it out as a possibility. 

DLA Piper’s figures in the Middle East

 Related stories: 

• DLA's restructure leaked to media
• DLA Phillips Fox denies financial integration rumours
• DLA redundancies roll on in Dubai