During the first half of the decade, the untapped potential of Africa's legal markets attracted a steady stream of ambitious international law firms looking for the next big thing, far from the lingering effects of the financial crisis at home.

In 2011, Allen & Overy (A&O) became the first magic circle firm to establish an official presence on the continent with a launch in Morocco, followed swiftly by Clifford Chance (CC), with Eversheds and Norton Rose also having made inroads via tie-ups with South African firms.

The following year saw Linklaters seal its formal alliance with South Africa's Webber Wentzel and Baker McKenzie launch in Johannesburg via the acquisition of Dewey & LeBoeuf's base in the city, and firms moving into the continent since then have included Hogan Lovells, Herbert Smith Freehills (HSF), Clyde & Co and Pinsent Masons.

However, the past two years have seen a marked slowdown in the number of international firms opening bases in Africa, and even new alliances with local firms are now seen by many as a potentially risky move in markets that can swing between buoyant and lacklustre at the drop of a hat – or at least with every election.

As Bakers Johannesburg managing partner Morne van der Merwe says: "Ten years ago, the narrative around Africa was very positive. Now there's a lot of political and economic uncertainty."

So how can law firms make their mark on the continent in 2018?

Law firms considering a move into Africa have a variety of options – an office launch, a formal alliance, or informal associations with multiple firms across the continent. But one thing most are agreed on is the importance of carefully selecting the right markets to focus on, rather than chasing coverage for coverage's sake.

Stuart Matty, global capital markets head at White & Case, which has had a Johannesburg base since 1995 and opened in Cairo in 2016, says: "In order to deliver best-in-class advice in Africa you don't need to plant a flag in every jurisdiction, but given the geographic size and economic diversity on the continent, you do need a clear strategy in place to focus on the right opportunities."

Those opportunities are currently centred around South Africa, Nigeria, Kenya and Zimbabwe, according to partners working on the continent, where recent improvements in the political landscapes have had a positive effect on prospects for business.

"Demography is destiny," says HSF Johannesburg managing partner Baring. "Most of the population growth globally is going to come from Africa in the next 20 years, so there will need to be more legal hubs on the continent. Should Nairobi and Lagos change their bar rules, they may become them, but for the moment Johannesburg is the natural choice because of its excellent infrastructure, strong professional community and welcoming attitude towards international law firms."

Linklaters Africa head Andrew Jones says: "Nigeria is one of the big economies on the continent. We've seen firms set up presences in South Africa and Kenya and smaller countries already, so I'm sure that law firms pursuing more localised models would see having an office in Nigeria as a good opportunity."

Webber Wentzel senior partner Christo Els says: "There are often rumours about foreign firms entering Nigeria, but to date it has remained fairly closed and dominated by the local firms."

However, that may be changing, with DLA Piper Africa chairman James Kamau saying that when his firm was tying up with Lagos practice Olajide Oyewole last May, their research suggested that more international law firms would be likely to follow suit.

CC's Jennifer Mbaluto (pictured), who co-heads the firm's east Africa practice, cautions that the opposite side of the continent presents different challenges. "A major challenge from an east African perspective is finding a local law firm with the scale and depth to cater to the client – the large independent firms would rather stay independent," she says.

According to several partners spoken to for this piece, the rise of economic blocs could serve as a focus for interested law firms looking to tap into regions with the biggest potential.

CC corporate co-head Nigel Wellings – who has acted on a number of deals with an African element, such as Carlyle's recent acquisition of a majority stake in east African pharma company Abacus – says: "The continuing development of economic blocs would encourage international investors to invest in the different regions as it allows businesses to develop scale. As the market develops further, that may lead us to consider whether a region can support an office."

Van der Merwe adds: "East African economies have become more integrated as a region and so have attracted more international investment. Hopefully in South Africa there will more integration going forward."

The Brexit factor

As Brexit creeps ever closer, this autumn's visit from UK Prime Minister Theresa May – who touched down in South Africa, Nigeria and Kenya – generated renewed interest in investment in the continent, particularly in the context of lingering 'no-deal' concerns.

ENSAfrica COO Otsile Matlou adds: "If there's no deal, the UK is going to have to reconsider its positioning in the world. It's natural it would consider opportunities elsewhere. Africa is an easy hunting ground and, from a legal perspective, the UK and South Africa share an unbreakable bond."

Bakers' Van der Merwe adds: "As a result of Brexit, we've seen proactive steps by trade organisations in the UK to find new ponds to fish in and to build bilateral relationships."

However, Mayer Brown Africa head Ian Coles cautions that things may not be that simple. "I think it's great that the PM has been down there, but we have to remember that it's the first visit by a British Prime Minister to sub-Saharan Africa for five years. One swallow doesn't make a spring. To put it into comparison, [France President Emmanuel] Macron has made nine trips to Africa to 11 different countries since he took office.

"Africa is highly interesting but it's not in a position to take a substantial piece of any trade we might lose with EU as a result of leaving without a deal on trade. As a solution to the trade we might potentially lose from leaving the EU in those circumstances, Africa doesn't currently even begin to fill the bucket."

Prospects for the future

Looking ahead, increasing political stability in many African countries is giving law firms more confidence in the continent as a whole, and DLA Piper's Kamau paints a positive picture of the current business landscape from the firm's perspective.

"Practices performing particularly well include projects and infrastructure, and the energy sector. We are finding a number of opportunities in retail due to the growing middle class in Africa and hence the demand for more retail spaces, and there is also growth in hospitality," he says. "This is all a result of stability and the increasing spending power of the new middle class. It shows that investors are looking at Africa seriously."

With local elections coming up in both South Africa and Nigeria in 2019, the political landscape remains subject to change, but while the continent's dynamic legal landscape still presents its fair share of unpredictability, partners believe the risks are worth it.

Melissa Butler, who leads White & Case's Africa practice, says: "It feels like people in the legal community are paying a lot of attention to Africa now again. Although interest does ebb and flow, and economically the continent tends to suffer more from shocks from external markets, I don't see interest of international law firms in Africa fading any time soon. There is a real buzz around it."