Clyde & Co's legal eagle surveys landscape from Dubai

When Adrian Low first came to the emirate, he marvelled at all the buildings going up. He has since witnessed the crisis but is now confident for the future, with a number of caveats.

Adrian Low is a partner with the law firm Clyde & Co, which offers a wide range of services from litigation to property. Jaime Puebla / The National

Adrian Low, a 41-year-old Briton, is what you might call a second-generation expatriate. His parents moved to the Middle East in the early 1990s, first to Saudi Arabia and then to Dubai, and he used to visit the region during school and university holidays.

"I'd go along to the Nakheel showroom at the foot of where the Palm Jumeirah was going to be, look at all the incredible developments and think: who are they building it for? Who's going to live in the middle of the desert?

"Well, now I live there, though it's not the desert any more, it's the Meadows development."

So when his previous law firm wanted to open a financial practice in the Arabian Gulf, Mr Low was well prepared to do it, and spent two years in Kuwait before Clyde & Co, based in Dubai, lured him to the emirate to do the same for it.

Clyde is one of the bigger full-service law firms in the region, offering a wide range of services from litigation to property, with 150 lawyers and 30 partners based in Dubai. From there, it also covers Saudi Arabia and Qatar.

A market leader in many specialisms, the firm wanted to beef up its banking and financial side, and that's where Mr Low came in.

"We were slightly lower down in the rankings for corporate, mergers and acquisitions work and financial, so that's my job." He believes the recovering Dubai economy will help to generate the increased activity to justify Clyde's investment.

"When I came to [work in] the region in 2009 it wasn't the best time to build a financial business, but Dubai at least is heading back to where it was before the crisis. The malls are full, the traffic is bad and it's becoming harder to get a taxi, all the usual barometers of Dubai commercial life are heading the right way."

However, there are lingering "legacy" issues with the financial industry, he says. "The banks are lending again, but very cautiously, not like the heady days of 2007. If customers bring them solid plans and their companies are good, they will lend, but anything more challenging and the banks will run a mile."

Reluctance of the banks to advance credit, especially for small and medium enterprises (SMEs) has been seen as a possible constraint on Dubai's economic recovery, and Nasdaq Dubai, the emirate's international stock exchange, is repositioning itself as a capital-raising centre for SMEs.

"The Nasdaq Dubai idea is a good one, in theory, but the challenge will be how easy it is to attract the extra capital needed for SME growth and how cheap will it be," Mr Low says.

"A lot of local companies, for cultural and historical reasons, are not used to opening up their books, and they will have to get used to greater transparency if they are to raise new capital on the markets, whether through equity issues or sukuk.

"It takes time to get the books in a suitable conditions to attract international investors. The companies coming to market must have a credible story, and the track record and numbers to support that story," he says.

"In the past, local companies have gone to London to raise cash because access and liquidity are on offer there. You've got to have a critical mass for listings in Dubai. I suppose emerging market status would help, but the momentum is all important."

He sees positive signs in local companies "leading by example", like the sukuk from Majid Al Futtaim Holding and the Dubai Government's new enthusiasm for Islamic bonds.

"The Government has to use encouragement rather than coercion," he says.

Other elements of the "soft" infrastructure also need to be improved: company law and bankruptcy procedures, in particular, should be modernised more quickly, he says.

"Everybody was getting very excited about the possibility of 100 per cent foreign ownership in the new company law, but you can understand why it's a challenge for the Government. I think for the time being it's in the 'too difficult for now' pile, but they will come back to it."

On bankruptcy procedure, he thinks Decree 57, the mechanism put in place to deal with the restructuring of Dubai World in 2010, has worked well and should be extended, and also believes decriminalisation of bounced cheques should be accelerated.

"Sure, some bankers like the idea but only because they have no alternative for getting their money back.

"But people need to be allowed to fail in business without being criminalised. It's not the same as fraudulently writing a cheque you know will bounce."

What is the lawyer's view of recent decisions by the government to put two high-profile restructurings - Zabeel Investments and Amlak - although a special legal commission rather than ordinary civil or Dubai International Financial Centre courts procedures?

"You're in dangerous territory when you write specific laws for specific companies, but there are always exceptions. In the West, we've got used to the idea of 'too big to fail', after all, so maybe that applies in these situations as well."