Go­ing le­gal

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,

Finweek English Edition - - INSIDE - BY CIARAN RYAN

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

Westhuizen

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