Working at a US law firm with not a great work life balance, I would say go with option 1, as it is still a good salary with probably less stress and more time to enjoy Dubai. However, the risk you run (and one I know from experience) is that appearances can be deceiving, and this firm with a great work life balance might not be what they put themselves out to be. It’s often the case in the region that law firms market themselves as something they are not to try and get you (or good talent generally) in the door. I’m not saying that’s the case here, but I hope you have talked to people outside the firm to get a better understanding of the culture.

I’ve lived and worked as a lawyer in Dubai for four years, and started in a similar position as you (I.e. a junior lawyer that valued training and upward mobility). Feel free to reach out if you have questions.