Leading British and US law firms are spending more of their time eagerly chasing business in fast-growing Africa, but many are still puzzling over whether to seek local 'best friends', set up alliances, open offices or just carry on trying to do it from London and Paris. Caroline Thorpe reports

Andrew Jones of Linklaters is doing it. Kem Ihenacho of Clifford Chance (CC) is doing it. Philip Stopford and Stuart Matty of White & Case, Dentons' Paul Bugingo, Covington & Burling's Witney Schneidman – turns out they're all at it too. Regularly. 

What is it they're up to? The answer is short: travelling to Africa. They are among an expanding cadre of senior lawyers and advisers from leading global law firms who have been told to seek out opportunities and develop their practices on the vast continent. 

"If I go to Kenya tomorrow, I wouldn't be surprised to bump into other lawyers in the hotel I'm staying in – particularly lawyers from the US and UK," remarks Bugingo, partner and chair of Dentons' Africa steering committee. Jones meanwhile calculates that Linklaters lawyers have made "well over 100 trips from London alone" in the past year.

The reason for their interest is no great secret: collectively Africa's economies continued to grow in the wake of the 2008 financial crisis while those in Europe and the US stalled or shrunk.

Together, the continent averaged 5% growth last year compared with a 0.3% fall in the EU and a tentative 2.2% recovery in the US. Law firms, then, see in Africa the potential to offset tougher trading environments and falling revenues elsewhere. 

Moreover, global investors, notably from China, are backing huge energy, commodities and infrastructure projects on the continent. Where clients go, their legal advisers follow. And in the longer term, law firms also believe that markets are primed for a consumer boom. "Interest in Africa as a growth market has increased in the last two to three years and it's now one of the most exciting opportunities for growth," says White & Case's Matty. 

Setting up shop

Less well-explored is how best to approach working in Africa. Law firms with African ambitions – even those with relatively long histories on the continent – face myriad choices when considering how to pursue them in a way that best balances risk and reward.

Where to focus in an area containing more than 50 jurisdictions and which, from top to toe, measures roughly 5,000 miles? Which sectors promise the most? And with leading law firms adopting various African models – from proprietary hub offices in key jurisdictions, to alliances and networks with local firms, and directing events from Europe – what is the best strategic approach to working there?

First up: where? Given Africa's size and diversity, it is unsurprising that a definitive list of key jurisdictions remains elusive. Where a firm operates is influenced by its clients, sector expertise and preferred Africa strategy. Untangling this trio of where, what and how is tricky. Each will inform the others, as well as depend in part on the firm's history, expertise and set-up outside the continent. 

Norton Rose, for example, began advising mining clients in South Africa more than a century ago. Today, as Norton Rose Fulbright (NRF), it finds itself with three offices in South Africa, and one in each of Dar es Salaam in Tanzania and Casablanca in Morocco.

Linklaters organises its practice to reflect Africa's three distinct legal and linguistic traditions, with Francophone, Lusophone and Anglo-Saxon divisions mirroring the firm's bases in Paris, Lisbon and London. This year it added a tie-up with South African outfit Webber Wentzel. "There are always a load of deals coming out of South Africa," says Jones. 

Casting the net still wider, DLA Piper's Africa Group – a collective of exclusive relationships with firms in 14 African countries – follows that firm's use of a similar model worldwide.

While such historic links may point some firms towards particular jurisdictions, Africa's size demands that law firms constantly reassess where they need to focus attention. Bugingo's bold claim that Dentons "is one of a handful of firms that have worked in every country on the continent" is an indication of the continent's scope. 

Countries commonly cited by firms active in Africa include South Africa and nearby Namibia and Botswana; Kenya, Uganda, Tanzania and Mozambique in the east; Nigeria (a particular focus for Clifford Chance, for example), Ghana and Cameroon in the west; and in the north Morocco and, recent unrest notwithstanding, Egypt.  

Tapping the well

Important sectors are easier to marshal. The traditional powerhouse industries of natural resources (oil, gas and mineral) remain strong and an organising principle for international firms.

"We opened in South Africa in 2003 because our global mining group wanted to service mining clients investing in Africa, as well as African clients seeking access to capital in the UK and Canada," says Al Gourley, London co-head of the mining practice at Canadian firm Fasken Martineau. "There were three or four people initially, which grew to about 10." 

That number increased to more than 80 in October 2012, when the firm signalled its commitment to the market by merging with Johannesburg outfit Bell Dewar. 

"We had seen a lot of benefits from being present in South Africa and, when the opportunity to merge with a much more established firm arose, it was a great opportunity to entrench our position there and enabled us to further demonstrate our relevance to the resource giants of Africa, such as BHP Billiton, Anglo American and Vale," says Gourley.

White & Case's Stopford adds that energy will continue to be a crucial sector: "The demand for power throughout Africa is phenomenal. If you take the plane from London to South Africa, you fly over Africa for hour after hour where it's completely dark. It is a crude way of looking at it, but… there are massive power needs." Rob Otty, managing director of NRF's South Africa practice, agrees: "Energy is a huge play for us."

Telecoms, banking, private equity, capital markets and M&A crop up repeatedly as partners rattle off areas of increased activity.

Linklaters' Jones is among those who add dispute resolution to the list. He says the recruitment of three international arbitration partners to its Paris office last month aims to satisfy increased demand in Africa: "There is more and more foreign direct investment and it's a function of the increased level of investment. As markets grow, so does the whole range of services required."

Looking further ahead, Otty is among several experienced hands to note a "second phase of inbound investment, particularly from Asia. There's a consumer goods play and there's going to be another huge one in retail. We see opportunities there at the moment."

Identifying opportunity is one thing; calculating how to grasp it another. The biggest dilemma for law firms remains: how exactly should international practices meet their strategic ambitions in Africa?

"As I see it, you can have one of three approaches," says Gourley, who in 2003 helped establish Fasken Martineau's Johannesburg office, going on to manage it from 2005 to 2011. The first, he says, is building networks "of relatively loose affiliations". The others are forming alliances or opening proprietary offices.

Best friends required

The first 'best friends' approach is the preferred method of King & Wood Mallesons SJ Berwin, says London-based procurement partner Stuart Jordan, whose experience includes advising on a major new hydropower plant in sub-Saharan Africa. "We're trying very hard to strengthen our network with local firms," he says.

Working with African firms is a necessity in his line of work, he continues: "It's the usual position that the local firms won't handle the international project finance or big procurement work and we can't advise on the local law. Still, the two parts are closely connected and this needs good skills across both teams. 

"What we try to do instead [of having offices in Africa] is to have good best friends, especially in key jurisdictions like Kenya, Nigeria, Tanzania, Uganda and Mozambique. The top commercial law firms in Africa are very professional outfits. They are in London a lot and we visit them too."

Wooing best friends is a competitive business, Jordan adds. "We have to be alive to the fact that there are a lot of international law firms and relatively few African commercial firms, so it is up to us [as a firm] to differentiate ourselves. Since these tie-ups are generally ad hoc, we know that we have to show on an individual project basis that we'll help to give them the best chance of winning an instruction and we look at them in the same way."

CC is among those battling for best friend status in sub-Saharan Africa, says Ihenacho (pictured). "In every country we want to be the best friends with the best lawyers because our clients have an increasingly sophisticated view of who they want to work with. The aim is to be the go-to firm for quality international work on the continent," Ihenacho explains.

To date the firm has befriended about 60 local firms across Africa, entering into non-exclusive relationships with up to seven practices in a single jurisdiction. No doubt aware of thecompetition, Ihenacho emphasises his firm's investment in such relationships.

"We've just launched the Clifford Chance academy, which is about quality training on the ground [in Africa] for partners and associates at our relationship firms," he says. Participants attend up to five days of training a year around the continent. 

Such training, a feature of many international firms' African activity, is more than a carrot to persuade local firms to shun rival bids for best friend status. It is also an attempt to offset a key risk of the 'network' approach: patchy quality. 

"Quality is a big issue," says Jones. "It's easy to dream of having offices all over Africa. Making sure the quality of the offering lives up to your brand is something we're obsessed with at Linklaters."

Brothers and allies

The firm's recent alliance with Webber Wentzel is its only significant diversion from running African work from London, Paris and Berlin, and it was not entered into lightly, according to Jones. 

"What's nice about that is we knew them really well. We were already their first cousins and now we're their brothers. We already had some important clients in common, for example in the mining industry. But the real driver was to expand by appealing to more clients. We're cautious about opening up offices. So the approach we have taken is to build on something that was already there."

Dentons is arguably the international firm most invested in the alliance approach – effectively one step up from best friend networks. Historically active on the continent and with an office in Cairo, various mergers have lifted the number of fee earners engaged in African work to more than 100, according to Bugingo. Dentons has also built a network of 20 associate offices across the continent. 

Though each office is independently owned and run by local partners, they share branding and pitch for clients alongside Dentons lawyers. "Our network of associate offices continues to be one of the cornerstones of our Africa practice," says Bugingo (pictured).

But he admits that difficulties can arise. Three such Dentons alliances – in Mauritius, Botswana and Namibia – were terminated when the local firms chose to move to other networks, the two latter cases switching to DLA Piper. However, Bugingo is undeterred. "Our strategy remains a progressive, evolving one. As we consider how we make more money and serve our clients better, we may see the need to widen and deepen our presence on the ground in Africa, including the possibility of opening another office."

Bugingo demurs over the specifics of such a move. Yet Shearman & Sterling's Christophe Asselineau, based in Paris, reckons: "The trend will be [for international firms to have] two or three offices in Africa." He says Shearman plans to open in Egypt, although he does not say when. 

Hub and spoke

For Gourley, a handful of proprietary offices is the most likely guarantee of quality and protecting the brand. "Another strategy is to build hubs, for example, with a very strong proprietary office in South Africa, maybe Nigeria – maybe Angola and DR Congo – and you build enough expertise out of these main hubs whether in energy, mining or other fields to service the countries associated with that hub."

With hubs, then, the question of 'where?' becomes critical once again. White & Case is betting on Johannesburg, where it opened a small office in 1995 to service non-Francophone sub-Saharan Africa.

It recently hired two partners from South African firm Bowman Gilfillan and added one from its London office, taking the Johannesburg partner total to five. Further development is planned, says Matty: "In southern Africa the infrastructure needs are huge."

Allen & Overy's (A&O) Paris partner Tim Scales is unswayed: "People talk about Johannesburg being a hub. If you look at places like Nigeria, it's as far away from Johannesburg as it is from London." 

For Scales, Lagos, Nairobi or perhaps Accra might prove better choices, adding "it's certainly not beyond the realms of possibility" that A&O would open another hub in Africa beyond its current sole outpost in Casablanca, opened in 2011. The firm's African revenues have doubled in the past year, he says.

"Casablanca is the most obvious embodiment of how important we see Africa," Scales asserts. The 30 lawyers based there spend a third of their time on work outside Morocco, he estimates. In total their work accounts for a quarter of A&O's African revenues. 

"Morocco had several strategic advantages for us," he explains. "In itself, it is a vibrant economy that is attracting a lot of opportunities. It's also a hub for North Africa and sub-Saharan Africa."

In turn this contrasts with Ihenacho's assertion that CC's Casablanca office "is focused on Morocco and the North African region". As for sub-Saharan Africa, Ihenacho says his firm sends a lawyer a week to Nigeria on average, and he is there monthly himself. 

Which begs the final question: is it possible to run a practice from Europe alone? "Four years ago I would have said 'yes' given the type of work that was there [in Africa]," suggests Asselineau.

"Now it is easier to be on the ground. But I'll caveat that: for some international firms that have local offices a lot of work is still done out of London and Paris and the local office is then a flag on the map.

"Also, just because you've got an office – for instance in South Africa – doesn't mean you have more expertise or experience in North or West Africa than firms in London or Paris that have been working that patch for years. Having offices is important but it's still a model that's evolving."

That is seconded by Linklaters' Jones, who says: "A lot of the most interesting stuff also comes out of… the more esoteric countries – much more structured, specialist deals that are the sort we can do really well. You could never cater for those properly by having generalists on the ground.

"For a lot of the structured, specialist deals we do in Africa, there is only a handful of people who know how to do them in Africa… so there really is a finite number of lawyers in the market anyway. The person in Paris who has done the last few deals in Francophone Africa has a degree of expertise that no one else has. Combining that with the right local expertise on the ground is incredibly important."

He therefore considers UK firms to have the edge on their US counterparts in the African market (see below): "US firms tend not to have very developed European offices, which is pretty constraining given the legal and linguistic traditions in Africa."

But setting home jurisdictions aside, the macro-economic allure of Africa is unlikely to dim any time soon. Asselineau, for one, is sure: "The market definitely won't go backwards." Yet just as certain is the difficulty in how a firm should go about entering that market. As Gourley concludes: "It's a puzzle that hasn't been solved."

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US firms: the foreign ministry approach

Witney Schneidman (pictured) is not a lawyer. He never even attended law school. Yet as 'senior international adviser', he is the person spearheading US law firm Covington & Burling's attempt to expand its business in Africa.

"The plan is for Covington to be known as a firm that has tremendous knowledge and expertise when it comes to investing in Africa and can help clients achieve their commercial objectives, but in a way that really contributes to economic development," he says, speaking from Covington's Washington DC headquarters.

Schneidman's CV includes stints as deputy assistant secretary of state for African affairs under President Clinton and co-chair of the Obama campaign's 'Africa experts group'. Most recently he ran a consultancy that helped "companies be successful commercially and strategically to achieve an economic dividend".

Covington is among several US law firms that have hired experienced political, regulatory and diplomatic hands to widen their African footprints. Last year Greenberg Traurig recruited Jude Kearney, previously an emerging markets partner at Patton Boggs, to head its Africa practice. Though a lawyer, Kearney is an experienced international trade negotiator following a stint in the US commerce department. 

Similarly, in April Capitol Hill stalwart Singleton McAllister joined the Africa practice of Williams Mullen's Washington DC office. A seasoned Government relations lawyer, McAllister has held several senior positions within the US Congress and, like Schneidman, advised President Clinton on African policy. 

Schneidman refers to the trend as "the mini-state department approach". "Covington has really innovated. Specifically, I've been working in Africa for a very long time. I've always been interested in the role that the private sector can play in economic development. In Africa during the last 10-15 years, tremendous growth opportunities have emerged."

He estimates that about 30-35 of the firm's 800 lawyers worldwide are working on African matters at any one time. He hopes to increase that by persuading more clients – mostly multinationals – that he can help smooth their path on the continent.

"When a firm [client] goes into a market they'll ask – if it's, say, a consumer product like technology – which countries should we go to first? What sectors, where in Africa, what are the regulatory challenges that we're going to face and who do we want to know? If it's a US company, can the US Government be of help to us?"

Covington works with an informal network of local African firms. "We've looked at [potential models] very carefully," Schneidman says. "We have conducted a lot of due diligence. We definitely [work with] more than one firm per jurisdiction, though we do have relationships that we prefer and we give priority to."

Schneidman will shortly be packing his bags for a tour of Angola, South Africa and Rwanda. "Certainly we will continue to expand our network," he concludes. "I would love to be able to go to my management committee and say there's a business case for opening an office in x country."

Related: African Legal Awards 2013 – the winners.