LEGAL SERVICES IS ONE SECTOR OF THE ECONOMY THAT IS BOOMING. THE BIG 6 LEGAL FIRMS ARE ROLLING OUT NEW OFFICES AND ALLIANCES ACROSS AFRICA WHILE BEEFING UP THEIR TEAMS IN SOUTH AFRICA. DRIVING THIS GROWTH IS AN INCREASINGLY COMPLEX REGULATORY ENVIRONMENT,
It’s a sign of the times that legal services firms are booming while the rest of the economy limps along. Werksmans recently announced it would relocate its Johannesburg head office to the new Central development opposite t he Gautrain station i n Sandton, where it will be the anchor tenant, occupying 12 500m² of space.
THE REAL GROWTH OPPORTUNITY GOING FORWARD IS IN SUBSAHARAN AFRICA, WHICH – LIKE SA – IS BESET WITH INCREASINGLY COMPLEX COMMERCIAL AND LEGAL OBSTACLES.
ENS africa (Edward Nathan Sonnenbergs) recently took up more space in its Cape Town and Durban offices and is looking to acquire bigger offices i n Johannesburg. It currently has 14 off i ces i n seven countries across Africa.
Bowman Gilf i l lan Africa Group has grown its number of attorneys by 15% to 476 and doubled the size of its Kenya office in the past two years. Over the same period it added three new offices – in Durban, Botswana and Madagascar – bringing its total office count in Africa to eight.
Webber Wentzel in Johannesburg currently occupies t hree buildings in Illovo, but plans to consolidate all its staff in one building now under development at 90 Rivonia Road in Sandton.
EXCITING DEVELOPMENTS NORTH OF THE BORDER
All of the Big 6 legal firms report substantial growth in the last two years. The biggest growth appears to be in Africa, ref lecting the migration of SA c ompanies nor t h of t he Limpopo in search of new markets.
If SA has become a regulatory minefield, the rest of Africa is no different. While South Africa n companies have to negotiate stiffer mining a nd affirmative action regulations at home, other countries in Africa have adopted similar laws of their own under the rubric of “resource nationalism” and “indigenisation”.
Webber Wentzel has teamed up with global l aw f i rm Linklaters to pave the way for its expansion across t he continent. Christo Els, senior partner at Webber Wentzel, says the real growth opportunity going for ward is i n sub-Saharan Africa, which – like SA – is beset with increasingly complex commercial and legal obstacles.
It is no longer suff icient to offer clients vanilla legal advice. Most of the big groups have added non-legal ser vices such as r isk management, forensic i nvestigations, accounting and other disciplines, blurring t he lines between traditional accounting and legal ser vices f i rms. In the era of globalisation, a vaguely worded contract or a miscalculation on pricing can be catastrophic. No South African company would venture into Central or West Africa without an ace legal expert at its side. The risks are simply too great.
Norton Rose Fulbright’s head of the regulatory and investigations practice, Marelise van der Westhuizen says the intensified regulatory regime in SA’s stringent and complex reg ulator y environment is at the forefront of the issues facing businesses today. “South Africa’s regulator y environment is the most complex and stringent on the African continent and corporate compliance has become particularly important as South Africa adapts its legislative regime to meet external and internal economic forces.”
A THRIVING CONTINENT OFFERS OPPORTUNITIES
Building a pan-African network of off ices doesn’t come cheap, but is essential in the race to stay ahead of the game. Those law firms that choose to focus on the SA market are likely to lose clients that are looking beyond SA’s borders for opportunities. Hence all the Big 6 law firms have established alliances or opened offices in other jurisdictions where they can offer their clients a level of local legal intelligence that would not be possible from Johannesburg.
“African states run on a timeframe and language of their own, quite unlike most other countries, and it is almost impossible to enter as an outsider and immediately know where to go, what to do and, even more importantly, how it is done,” says Collins.
The scramble for opportunities in Africa was in the past driven by natural resources and infrastructure, but the last decade new markets have opened up in fast moving consumer goods, financial services and telecommunications.
Brent Williams, CEO of Cliffe Dekker Hofmeyr, says much of the firm’s growth in the past two years has come from clients in SA and from the rest of Africa. The key growth areas are mergers and acquisitions, capital markets, commercial real estate, commercial dispute resolution and arbitration and tax. Clients are also turning to law firms to help them navigate increasingly tortuous employment laws, finance and banking codes and competition law, while projects and infrastructure and technology law are other areas of growth. “Driving a lot of legal advisory work at present is the interest in investment in Africa, driven in part by a search for ret urns t hat disappeared f rom developed markets, post the global f inancial crisis. There are two aspects to the search for returns. The one is the renewed effort to capitalise on Africa’s mineral resources and the other is to capitalise on particular oil and gas discoveries in the past few years that were made off both the east and west coasts of the continent. In addition, Africa’s burgeoning middle class is driving demand for consumption, such as retail and also utility outputs such as telecommunications, electricity and water,” says Williams.
Africa’s vast infrastructural needs ar e al s o at tr a c t i ng i nvest ment, particularly rail, roads and ports. “Many infrastructural service providers are multinational and as such attract global lenders both from a development f inance perspective, and also from a retail banking perspective, who are keen to supply the needs in the market and to reap the benefits,” adds Williams.
Bowman Gilf i l lan Africa Group has off ices in SA, Botswana, Kenya, Madagascar, Uganda and Tanzania, and has an alliance with Nigerian firm, Udo Udoma & Bela-Osagie. “Our growth in Africa is expected to continue with the group looking to expand our offering while remaining focused on delivering seamless cross-border legal services in Africa. This is in keeping with the group’s strategic vision of becoming Africa’s pre-eminent law f irm,” says a spokesperson for the firm.
NO SOUTH AFRICAN COMPANY WOULD VENTURE INTO CENTRAL OR WEST AFRICA WITHOUT AN ACE LEGAL EXPERT AT ITS SIDE. THE RISKS ARE SIMPLY TOO GREAT.
An architectural impression of the Werksmans building
Marilise van der