Reality Check: Law Firms in Riyadh Diversify Work as Saudi Arabia Downscales Giga-Projects

In this article for Law.com International, James Clark discusses how Saudi Arabia’s Vision 2030 is evolving, with a shift from government-funded giga-projects to commercially driven, privately financed developments.

When Saudi authorities announced their Vision 2030 plan in 2016, a big part of the strategy to diversify its economy outside of oil was to build multiple giga-projects set to reshape the country’s future.

Futuristic megacities in the desert like NEOM, massive luxury resort destinations like The Red Sea Project, and entertainment cities like Qiddiya made headlines. Foreign investors and law firms jumped into big-ticket deals in real estate and infrastructure, with global real estate consultancy Knight Frank estimating a cumulative value of about $1.3 trillion.

But over the past year, Saudi Arabia has quietly begun to resize its most ambitious plans. Reported adjustments, delays, suspensions, and cutbacks have affected key giga projects. The Line, the futuristic linear smart city within the NEOM megacity, has been scaled back and its completion delayed. Trojena, the alpine resort in the desert, has seen major components paused or canceled. The construction of Mukaab, the cube shaped skyscraper planned to be the world’s largest building, has been suspended. Other projects have also been affected, and billion-dollar contracts have been canceled.

The change is due to a number of factors, including higher costs, lower oil revenues, and the reprioritization of Vision 2030 goals, to say nothing of the impact of the U.S.-Israel-Iran war that began in February.

As Saudi Arabia recalibrates its priorities, steering money away from megaprojects and toward sectors with clearer commercial returns and greater private capital involvement, international law firms in the Kingdom are diversifying beyond giga-projects work. Those that can’t shift their focus from these projects may have to downsize or even close their Saudi offices, some lawyers say.

Kirkland and Ellis partner James Clark, who is head of the construction practice group and based in Riyadh, said that Vision 2030’s strategy has been refined over time to reflect changing circumstances. He has advised on key giga-projects, such as The Line and Oxagon, and more recently on real estate projects.

“Rather than projects drying up or stopping, what we’re seeing is a shift in asset classes and towards greater independent financing instead of balance sheet spending,” he said, noting that this creates opportunities for the firm to bring expertise in financing strategies and project delivery.

Saudi Arabia and the Public Investment Fund have recently recalibrated investment priorities to focus on sectors such as tourism, manufacturing, mining, logistics, and technology. But the reduction in emphasis on giga-projects is not resulting in less work for lawyers, but in diversification, lawyers say.

Andrew Clarke, a Saudi-based partner in the energy, transport and infrastructure practice at Dentons, said that public-private partnership (PPP) projects are growing, from 2-3 projects last year to over 15 this year.

“It may not be a $200 billion project, but there’s still that scale of money moving, spread across water projects and multiple rail projects,” he said, adding that the government is focusing on value creation rather than on giga-scale projects.

This translates into more legal work in terms of volume for Dentons, as it deploys more lawyers on the ground rather than concentrating on a few big projects, he said.

When Saudi Arabia eased restrictions for law firms to practice in the Kingdom, many law firms opened an office there. Today, more than 30 Global 200 law firms have an office in Riyadh.

Many of them advised on giga-projects. Infralogic’s ranking of the top 15 law firms in Saudi Arabia by value of construction, infrastructure, and energy projects from 2021 to 2026 shows White & Case leading with 27 projects worth a cumulative $78 billion, followed by A&O Shearman with 16 projects worth $69 billion, and Clifford Chance with 19 projects worth over $57 billion.

Other firms have also focused on critical infrastructure, such as water, energy, waste management, and transportation, aligning with Vision 2030’s goals.

Alexander Sarac, partner and head of the infrastructure projects and energy practice in the Middle East for Addleshaw Goddard, sees a continued push in these sectors and an increase in work for traditional infrastructure PPP projects.

“We expect that law firms that previously worked with a focus mostly on giga-projects are also looking at these different markets,” he said.

While plans for critical infrastructure projects and events with fixed deadlines, like the Expo 2030 and FIFA World Cup 2034, remain steady, Jennifer Aguinaldo, senior analyst at Infralogic, said that “the restructuring in certain giga-projects and the changes at some PPP stakeholders have understandably slowed down the pace of project awards in some sectors over the past 18-24 months, not to mention the impact of the US-Israel-Iran conflict that began in February.”

One lawyer from a Global 200 firm attributes Saudi Arabia’s pullback on some giga-projects to three factors: the government’s reliance on oil and gas revenues, which capped spending; weak value for money on certain projects; and an overreaction after reviewing costs and realizing more capital would be needed to complete others.

Consequently, the lawyer said, law firms handling such work—whether new and understaffed, established but unscaled, overexpanded without a clear plan, or lacking a diversified client base—risk closing.

Meanwhile, lawyers say Saudi public entities are refreshing legal provider panels to prioritize cost control and digital infrastructure expertise. The Kingdom also aims to sign over 220 PPP contracts and mobilize more than $64 billion in private capital investments by 2030.

Construction practices need to keep pace with evolving asset classes and delivery models, Kirkland’s Clark said. Clients are shifting from tourism toward digital infrastructure, while giga-projects and government authorities are moving from balance sheet funding to alternative financing. He added that lawyers should combine construction expertise with project finance experience and a commercial outlook to adopt a pan-project approach and stay ahead of the full project lifecycle.

Dentons’ Clarke added that as giga-projects are being delayed or halted mainly due to a mix of financial reprioritization and resource shortages, “focus is shifting from massive single projects toward broader infrastructure that benefits the existing economy more directly.”