The professional services landscape in MENAT is ﬁrmly back on a growth trajectory.
Research by Source Global in 2019 suggests the consultancy sub-sector alone grew by over 9%. This pushed the market through the $3 billion barrier for the ﬁrst time, underlining the distance travelled since the sluggish years following the global oil price slump1 2.
Saudi Arabia accounted for more than half of this spend, driven by initiatives linked to its National Transformation Programme. Together with diversiﬁcation efforts by the UAE and other states, this will remain a key growth driver for the sector, notes Yaser Dajani, FTI’s Senior Managing Director, Head of Middle East Forensic & Litigation Consulting.
“Programmes such as Saudi Arabia’s Vision 2030, UAE’s Vision 2021 and Expo 2020 have all created signiﬁcant momentum,” he says. “This opens up a whole range of opportunities that were not available to professional services 10 years ago, particularly in places like Kuwait, Saudi Arabia and the UAE.”
Sachin Kerur, Head of Middle East Region at Reed Smith, outlines the knock-on effects for consultancies: “The diversiﬁcation of economies will require legislative reform. The deconstruction and reconstruction of the economy leads to a whole raft of work.
“And the increasing need for cross-border relationships is good news for international ﬁrms that have platforms across several jurisdictions.”
As they plan reform, governments are increasingly open to the views of professional services companies and, through them, business investors. Samer Qudah, Managing Partner at Al Tamimi & Company, points to the UAE’s arbitration law as an example.
“We lobbied for that law, because it was key for international investors to feel that their rights would be protected if they go through a dispute,” he says.
“Also, laws in Egypt, Qatar and the UAE now allow 100% ownership for foreigners in certain sectors. Again, that’s a move that was inﬂuenced by professional services providers.”
As economies evolve, markets have naturally followed. Shiraz Sethi, DWF’s Middle East Managing Partner & Co-Head of Employment, has witnessed huge changes in his 12 years in the UAE.
“The UAE government continues to mature and update the regulatory framework In line with best practice,” he observes. “There are numerous initiatives being conducted in the UAE to encourage FDI and streamline the process of investment and business to ensure diversification of its economy.”
Michael Armstrong, Regional Director for the Middle East, Africa and South Asia at ICAEW, sees change across the sector prompted by the non-oil sector, especially technology. “I’m seeing this particularly strongly in accountancy, where the transformation is intrinsic to how we upskill young talent and ensure the future of the industry,” he adds.
The sector in much of MENAT is now characterised by intense competition. Legal firms, in particular, jostle for position in an unconsolidated market, with international players competing against increasingly sophisticated local firms.
Gerard Rahman, CEO of BDO UAE, sees oversupply throughout the business environment. That puts the onus on professional services advisers to find unique solutions to their clients’ problems.
“In the past, we may have gone in with a toolkit and tried to fit those tools to the client issue,” he says. “We need to be listening to each client’s challenges and forming an understanding of its needs.”
Across the sector, client expectations are rising. Fixed fee arrangements are often preferred over billable hours. Many seek one-stop solutions. More and more providers are being asked to bid in collaboration with complementary experts in other fields.
Firms are even expected to prove their appetite for a client’s business by working for a period without payment, says Matthew Lewis, Partner, Middle East & Africa & Regional Head of Leadership Consulting at Boyden.
“That’s a particular issue in professional services because it’s time-based as opposed to output-based,” he points out. “Where firms are providing a service on an unretained basis, they’re at risk. And for multinationals, that payment problem can roll into the following year, which is not good for shareholders.”
For those who can meet clients’ demanding standards, however, there is a wealth of opportunity in MENAT’s fast-evolving economies. Consultants simply have to be open to innovation, concludes Mark Blanksby, Chairman, Middle East & Africa Region at Clyde & Co UAE.
“If you can get over the hurdle of explaining the value we bring to a transaction, the next issue is that clients are, quite rightly, demanding more efficiency and price certainty. That is requiring firms to look at new ways of delivering services, using solutions such as AI, automation or cheaper offshore jurisdictions,” he says.
And for Hisham Farouk, CEO at Grant Thornton UAE, professional services will sit at the heart of MENAT states’ development over the next few years.
“We need to resolve the big problems collectively,” he declares. “Whether it’s a regional conflict or the markets’ reaction to oil and gas pricing, the resulting headwinds on business need to be faced together. Professional service firms can assist businesses during these times and convert challenges into opportunities.”
Stephen Anderson, Markets Leader at PwC Middle East, sees the challenge as closer to home. The firm’s future in the Middle East, he argues, is reliant on the quality of staff with skills relevant to match today’s demands. “Our traditional models of developing our people is changing rapidly. For example, we need to attract and recruit graduates and develop them in new ways, such as in our cybersecurity academies, and give them a range of expertise that will help them move through the firm to become senior in new areas such as cybersecurity, behavioural science and customer experience.”
HSBC is proud to be supporting the sector on its exciting growth trajectory
In the MENAT marketplace, professional players vie not only for contracts but for a tight pool of potential recruits. Firms are responding by finding new ways to attract and retain people with critical skills.
MENAT has leap-frogged western economies in many technologies, such as 5G. And successful adoption of digital advances will underpin achievement of the goals in the visionary transformation programmes of Saudi Arabia and the UAE.