As African economic development continues apace, international and local law firms alike have been wrestling with the problem of how to best provide a comprehensive Africa-wide service. While firms’ strategies for covering the region differ wildly, to date no-one has managed to create a truly pan-African legal offering. 

Operating across Africa is notoriously difficult. Its sheer size, the diversity of languages and legal systems and the differing levels of economic development are all brakes on the spread of law firms across the continent. 

Brent Williams, chief executive of DLA Piper’s former African ally Cliffe Dekker Hofmeyr (CDH), says: “Even international firms have struggled or are battling to establish a footprint because it’s so different to the EU market or the US market.” 

Christo Els, senior partner at Linklaters’ South African ally Webber Wentzel, agrees, saying:  “Replicating what the big firms did in Europe is not so easy to achieve in Africa.” 

Of the big five South African firms, only Bowman Gilfillan and ENSafrica have opened their own offices in jurisdictions outside South Africa. Bowmans has offices in Botswana, Kenya, Madagascar, Tanzania and Uganda as well as South Africa, while ENSafrica is spread across South Africa, Rwanda, Namibia, Tanzania and Mauritius. 

Others are instead building networks of local firms to cover a range of jurisdictions and referring clients to each other. This has been the approach for firms like South Africa’s Werksmans, which is part of the LEX Africa network and, elsewhere, Kenya’s Anjarwalla & Khanna, which is part of the African Legal Network (ALN). 

Going it alone

For those that have offices in multiple jurisdictions there are numerous challenges to overcome, as well as a decision to be made on how many jurisdictions a firm has to be in in order to justifiably say it offers a credible pan-African service. Michael Katz, chairman of ENSafrica, comments: “We believe the three features of a successful pan-African law firm are location, integration and seamless operation.” 

When it comes to location, opening in all 54 countries in Africa is unnecessary. Shayne Krige, head of Werksmans’ Africa practice says: “Do you need to be in all of those jurisdictions? If you are in South Africa do you need to be in Lesotho? No.” 

As Roddy McKean, a director in Anjarwalla & Khanna’s corporate group, comments: “We are seeing a regionalisation of Africa, with the creation of multiple hubs.”

Regional divide

If firms do not need to be everywhere in Africa, how do they select which locations are necessary? 

For many sub-Saharan firms North Africa is too closely integrated with Europe to make it worth putting too much effort into the region.  Doron Joffe, a director in ENSafrica’s corporate department, says: “North Africa is geographically close to Europe and the competitive advantage for the European firms is too great. We don’t think we can have a strategic impact there.” 

Nairobi in Kenya is increasingly seen as the economic hub of East Africa, while Lagos in Nigeria is the key city in what is now Africa’s biggest country by GDP. Jonathan Lang, Bowman Gilfillan’s head of Africa argues that “there is a golden triangle of Nigeria, Kenya and South Africa where firms looking for a pan-African strategy would tend to focus.” 

There is a golden triangle of Nigeria, Kenya and South Africa where firms looking for a pan-African strategy would tend to focus

Kenya has been a relatively easy market for South African firms to crack. Bowmans opened its Kenyan office, known locally due to practising restrictions as Coulson Harney in 2008, and has seen it grow to 16 partners and more than 40 lawyers. 

In contrast, Nigeria has proved a greater challenge. Despite the lure of its large economy and its oil wealth, neither the South African firms nor the international heavyweights have managed to break into its market. 

Instead, Nigeria’s legal market is dominated by local firms such as Aluko & Oyebode and Olaniwun Ajayi. Its position as a large Anglophone country in the midst of largely Francophone West Africa means that it is relatively isolated from its neighbours. 

McKean comments: “Nigeria is such a big economy and there is so much legal work that, rather like the US, the top firms can work there without really needing to cross borders.” 

The domestic success of the Nigerian firms means that so far their partners have remained unimpressed by the blandishments of international firms. Lang elaborates: “Nigerian lawyers see the opportunity intellectually but they are quite savvy business people and being able to really demonstrate the value proposition to them in monetary terms is something which is more complicated.” 

Francophone Africa

Elsewhere, in francophone West Africa, 17 countries have joined together and are in the process of harmonising their legal systems through the Organisation for the Harmonisation of Business Law in Africa (OHADA). These countries are largely served locally in West Africa or by European firms with strong French offices. “West Africa is very different dynamic because of the Francophone element,” says Lang.

The same is true of  lusophone countries, such as Angola and Mozambique, where indigenous and Iberian firms dominate. 

Els argues that his firm’s alliance with Linklaters leaves it better-placed to work across the continent. “We have the alliance with Linklaters which can provide Francophone, Lusophone, and Anglophone assistance and the global access and brand.”  

Given these language barriers even a regional strategy – covering West, East and South Africa, looks difficult to achieve, let alone one with multiple bases across each region. Cultural and economic barriers must be crossed and no firm has yet managed to provide an integrated offering in all of the key markets. 

Stumbling blocks

Once a firm has identified where it wants to open it needs to hire local lawyers, either by merging or allying with a domestic firm or hiring local partners to set up its own base. Persuading a top tier firm in a jurisdiction to merge is not a popular option for local firms, largely because it would result in the loss of lucrative referral relationships they currently enjoy with multiple firms. 

 “African firms believe they have a greater role to play so are a lot more cautious about jumping into bed with a [single] firm,” says Hogan Lovells South Africa mining head Warren Beech. “They want referral relationships with a cross section across the spectrum.” 

There is also the issue of independence. As Lang notes: “If you are a 10 partner firm and the master of your own destiny there are concerns about becoming an office of a larger firm, even if you get satisfied economically.” 

Even international firms have struggled or are battling to establish a footprint because it's so different to the EU market or the US market.

African firms traditionally operate with a high level of leverage and partnership is therefore often highly lucrative. Steven De Backer of consultancy Afriwise says: “The partnership in most African firms is very closed, they pretend to be copying the UK model but they are very traditional, the founders keep the partnership quite tight.” 

Lang believes the tightly held equity of many African firms means they often operate “well above the percentage net profit margin of a typical international firm”. 

Persuading partners at successful firms with a strong grip on their local market and lucrative referral relationships to merge is therefore very difficult. Even hiring local lawyers is tough because in many jurisdictions there just aren’t that many. “There are not tons of lawyers around you can hire” notes Joffe.”It takes a while to find the right people.” 

Various markets prevent the sharing of profits with persons who aren’t lawyers outside of the jurisdiction or prevent naming the firm anything other than a name of existing or former partners

Regulatory restrictions to expansion are also a challenge. Anjarwalla & Khanna’s managing partner Karim Anjarwalla says: “Various markets prevent the sharing of profits with persons who aren’t lawyers or prevent naming the firm anything other than a name of existing or former partners.” 

Kenya, for example has both of those restrictions. In Ethiopia lawyers are not even allowed to form partnerships. However, lawyers being lawyers, regulatory restrictions have not proved an insurmountable obstacle to the expansion of firms such as Bowmans and ENSafrica. 

 “In most of the jurisdictions we have found a way to overcome those problems,” notes Joffe. “There are obstacles but we haven’t been prohibited from doing something we want to do yet.”

Moving forward

Bowman Gilfillan and ENSafrica both plan to open more offices in the next few years. ENSafrica has signed an agreement with a firm in Ghana, and is also looking at Nigeria and Kenya. Bowmans is targeting Nigeria, Ghana, Mozambique and Ethiopia. CDH, following the end of its alliance with DLA Piper in August, is redeveloping its pan-Africa strategy. 

Williams explains: “We want to develop a more focused strategy around Africa, we are working through that at the moment.” The firm continues to have informal relationships with firms in the DLA Africa group, but is looking for “tighter relationships in key hubs.” He identifies West and East Africa, Nigeria and potentially North Africa as areas where the firm is looking for more formal relationships. 

ALN is also on an expansion mission. The network is keen to add to its capabilities in the OHADA countries, with aspirations to add firms in Senegal, Cote d’Ivoire, Cameroon and the Democratic Republic of Congo. It is also examining Egypt, Ghana and Madagascar as potential expansion targets. 

Our strategy recognises the independence of firms from an economic perspective but seeks to integrate them in all other respects under the ALN umbrella

ALN is more integrated than most networks, and indeed, Anjarwalla hopes it will one day be a single law firm. He comments: “ALN’s ambition is to be a pan-African law firm.” He cites a franchise-type model, akin to an accountancy firm such as Grant Thornton, as the most likely approach, adding: “Our strategy recognises the independence of firms from an economic perspective but seeks to integrate them in all other respects under the ALN umbrella.”

But independent firms are far from alone in their attempts to crack Africa. International firms are also ambitious. Herbert Smith Freehills announced in October that it will launch in Johannesburg in 2015 with a double partner hire from Webber Wentzel. DLA Piper pushed for a full merger with its then alliance-partner CDH, and in the wake of their split plans to open a South Africa office in the first quarter of 2016. It also launched in Casablanca in October, gifting it its first base on the continent. 

Baker & McKenzie currently has offices in Egypt, Morocco and South Africa, and is thought to be eyeing Nairobi and Lagos as well. Eversheds meanwhile, has offices in Tunisia, Morocco, South Africa and Mauritius and, according to its Africa head, plans to open two to three more branded offices in West and East Africa. 

It also plans to grow its network, the Eversheds Africa Law Institute, which has partner firms in 37 countries. Africa head Boris Martor cites the network as a stepping stone towards further expansion on the continent, he says: “Over time the firms in the institute may become full members of Eversheds.” 

Given these moves it could just as easily be one of the international firms which is the first to create a fully pan-African offering.

The challenges are tough, but the prize is great, and a number of firms are on a mission to offer clients a one-stop shop for work in Africa. The likelihood of there being a fully pan-African law firm in the future is strong. Lang concludes: “In time there definitely will be. There is certainly a demand for it.” 

For those firms and networks racing to open up across Africa, the game is on, but which strategy will pay off?   

As African economic development continues apace, international and local law firms alike have been wrestling with the problem of how to best provide a comprehensive Africa-wide service. While firms’ strategies for covering the region differ wildly, to date no-one has managed to create a truly pan-African legal offering. 

Operating across Africa is notoriously difficult. Its sheer size, the diversity of languages and legal systems and the differing levels of economic development are all brakes on the spread of law firms across the continent. 

Brent Williams, chief executive of DLA Piper’s former African ally Cliffe Dekker Hofmeyr (CDH), says: “Even international firms have struggled or are battling to establish a footprint because it’s so different to the EU market or the US market.” 

Christo Els, senior partner at Linklaters’ South African ally Webber Wentzel, agrees, saying:  “Replicating what the big firms did in Europe is not so easy to achieve in Africa.” 

Of the big five South African firms, only Bowman Gilfillan and ENSafrica have opened their own offices in jurisdictions outside South Africa. Bowmans has offices in Botswana, Kenya, Madagascar, Tanzania and Uganda as well as South Africa, while ENSafrica is spread across South Africa, Rwanda, Namibia, Tanzania and Mauritius. 

Others are instead building networks of local firms to cover a range of jurisdictions and referring clients to each other. This has been the approach for firms like South Africa’s Werksmans, which is part of the LEX Africa network and, elsewhere, Kenya’s Anjarwalla & Khanna, which is part of the African Legal Network (ALN). 

Going it alone

For those that have offices in multiple jurisdictions there are numerous challenges to overcome, as well as a decision to be made on how many jurisdictions a firm has to be in in order to justifiably say it offers a credible pan-African service. Michael Katz, chairman of ENSafrica, comments: “We believe the three features of a successful pan-African law firm are location, integration and seamless operation.” 

When it comes to location, opening in all 54 countries in Africa is unnecessary. Shayne Krige, head of Werksmans’ Africa practice says: “Do you need to be in all of those jurisdictions? If you are in South Africa do you need to be in Lesotho? No.” 

As Roddy McKean, a director in Anjarwalla & Khanna’s corporate group, comments: “We are seeing a regionalisation of Africa, with the creation of multiple hubs.”

Regional divide

If firms do not need to be everywhere in Africa, how do they select which locations are necessary? 

For many sub-Saharan firms North Africa is too closely integrated with Europe to make it worth putting too much effort into the region.  Doron Joffe, a director in ENSafrica’s corporate department, says: “North Africa is geographically close to Europe and the competitive advantage for the European firms is too great. We don’t think we can have a strategic impact there.” 

Nairobi in Kenya is increasingly seen as the economic hub of East Africa, while Lagos in Nigeria is the key city in what is now Africa’s biggest country by GDP. Jonathan Lang, Bowman Gilfillan’s head of Africa argues that “there is a golden triangle of Nigeria, Kenya and South Africa where firms looking for a pan-African strategy would tend to focus.” 

There is a golden triangle of Nigeria, Kenya and South Africa where firms looking for a pan-African strategy would tend to focus

Kenya has been a relatively easy market for South African firms to crack. Bowmans opened its Kenyan office, known locally due to practising restrictions as Coulson Harney in 2008, and has seen it grow to 16 partners and more than 40 lawyers. 

In contrast, Nigeria has proved a greater challenge. Despite the lure of its large economy and its oil wealth, neither the South African firms nor the international heavyweights have managed to break into its market. 

Instead, Nigeria’s legal market is dominated by local firms such as Aluko & Oyebode and Olaniwun Ajayi. Its position as a large Anglophone country in the midst of largely Francophone West Africa means that it is relatively isolated from its neighbours. 

McKean comments: “Nigeria is such a big economy and there is so much legal work that, rather like the US, the top firms can work there without really needing to cross borders.” 

The domestic success of the Nigerian firms means that so far their partners have remained unimpressed by the blandishments of international firms. Lang elaborates: “Nigerian lawyers see the opportunity intellectually but they are quite savvy business people and being able to really demonstrate the value proposition to them in monetary terms is something which is more complicated.” 

Francophone Africa

Elsewhere, in francophone West Africa, 17 countries have joined together and are in the process of harmonising their legal systems through the Organisation for the Harmonisation of Business Law in Africa (OHADA). These countries are largely served locally in West Africa or by European firms with strong French offices. “West Africa is very different dynamic because of the Francophone element,” says Lang.

The same is true of  lusophone countries, such as Angola and Mozambique, where indigenous and Iberian firms dominate. 

Els argues that his firm’s alliance with Linklaters leaves it better-placed to work across the continent. “We have the alliance with Linklaters which can provide Francophone, Lusophone, and Anglophone assistance and the global access and brand.”  

Given these language barriers even a regional strategy – covering West, East and South Africa, looks difficult to achieve, let alone one with multiple bases across each region. Cultural and economic barriers must be crossed and no firm has yet managed to provide an integrated offering in all of the key markets. 

Stumbling blocks

Once a firm has identified where it wants to open it needs to hire local lawyers, either by merging or allying with a domestic firm or hiring local partners to set up its own base. Persuading a top tier firm in a jurisdiction to merge is not a popular option for local firms, largely because it would result in the loss of lucrative referral relationships they currently enjoy with multiple firms. 

 “African firms believe they have a greater role to play so are a lot more cautious about jumping into bed with a [single] firm,” says Hogan Lovells South Africa mining head Warren Beech. “They want referral relationships with a cross section across the spectrum.” 

There is also the issue of independence. As Lang notes: “If you are a 10 partner firm and the master of your own destiny there are concerns about becoming an office of a larger firm, even if you get satisfied economically.” 

Even international firms have struggled or are battling to establish a footprint because it's so different to the EU market or the US market.

African firms traditionally operate with a high level of leverage and partnership is therefore often highly lucrative. Steven De Backer of consultancy Afriwise says: “The partnership in most African firms is very closed, they pretend to be copying the UK model but they are very traditional, the founders keep the partnership quite tight.” 

Lang believes the tightly held equity of many African firms means they often operate “well above the percentage net profit margin of a typical international firm”. 

Persuading partners at successful firms with a strong grip on their local market and lucrative referral relationships to merge is therefore very difficult. Even hiring local lawyers is tough because in many jurisdictions there just aren’t that many. “There are not tons of lawyers around you can hire” notes Joffe.”It takes a while to find the right people.” 

Various markets prevent the sharing of profits with persons who aren’t lawyers outside of the jurisdiction or prevent naming the firm anything other than a name of existing or former partners

Regulatory restrictions to expansion are also a challenge. Anjarwalla & Khanna’s managing partner Karim Anjarwalla says: “Various markets prevent the sharing of profits with persons who aren’t lawyers or prevent naming the firm anything other than a name of existing or former partners.” 

Kenya, for example has both of those restrictions. In Ethiopia lawyers are not even allowed to form partnerships. However, lawyers being lawyers, regulatory restrictions have not proved an insurmountable obstacle to the expansion of firms such as Bowmans and ENSafrica. 

 “In most of the jurisdictions we have found a way to overcome those problems,” notes Joffe. “There are obstacles but we haven’t been prohibited from doing something we want to do yet.”

Moving forward

Bowman Gilfillan and ENSafrica both plan to open more offices in the next few years. ENSafrica has signed an agreement with a firm in Ghana, and is also looking at Nigeria and Kenya. Bowmans is targeting Nigeria, Ghana, Mozambique and Ethiopia. CDH, following the end of its alliance with DLA Piper in August, is redeveloping its pan-Africa strategy. 

Williams explains: “We want to develop a more focused strategy around Africa, we are working through that at the moment.” The firm continues to have informal relationships with firms in the DLA Africa group, but is looking for “tighter relationships in key hubs.” He identifies West and East Africa, Nigeria and potentially North Africa as areas where the firm is looking for more formal relationships. 

ALN is also on an expansion mission. The network is keen to add to its capabilities in the OHADA countries, with aspirations to add firms in Senegal, Cote d’Ivoire, Cameroon and the Democratic Republic of Congo. It is also examining Egypt, Ghana and Madagascar as potential expansion targets. 

Our strategy recognises the independence of firms from an economic perspective but seeks to integrate them in all other respects under the ALN umbrella

ALN is more integrated than most networks, and indeed, Anjarwalla hopes it will one day be a single law firm. He comments: “ALN’s ambition is to be a pan-African law firm.” He cites a franchise-type model, akin to an accountancy firm such as Grant Thornton, as the most likely approach, adding: “Our strategy recognises the independence of firms from an economic perspective but seeks to integrate them in all other respects under the ALN umbrella.”

But independent firms are far from alone in their attempts to crack Africa. International firms are also ambitious. Herbert Smith Freehills announced in October that it will launch in Johannesburg in 2015 with a double partner hire from Webber Wentzel. DLA Piper pushed for a full merger with its then alliance-partner CDH, and in the wake of their split plans to open a South Africa office in the first quarter of 2016. It also launched in Casablanca in October, gifting it its first base on the continent. 

Baker & McKenzie currently has offices in Egypt, Morocco and South Africa, and is thought to be eyeing Nairobi and Lagos as well. Eversheds meanwhile, has offices in Tunisia, Morocco, South Africa and Mauritius and, according to its Africa head, plans to open two to three more branded offices in West and East Africa. 

It also plans to grow its network, the Eversheds Africa Law Institute, which has partner firms in 37 countries. Africa head Boris Martor cites the network as a stepping stone towards further expansion on the continent, he says: “Over time the firms in the institute may become full members of Eversheds.” 

Given these moves it could just as easily be one of the international firms which is the first to create a fully pan-African offering.

The challenges are tough, but the prize is great, and a number of firms are on a mission to offer clients a one-stop shop for work in Africa. The likelihood of there being a fully pan-African law firm in the future is strong. Lang concludes: “In time there definitely will be. There is certainly a demand for it.” 

For those firms and networks racing to open up across Africa, the game is on, but which strategy will pay off?