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South African firms claim they offer a viable link into a tricky region.
by Lukas Becker

Branch out: South African lawyers claim they can help clients grow across the region.

When Webber Wentzel announced in July last year it had hired Roddy McKean from Lovells to head up its Africa group, eyebrows were raised.

McKean had considerable corporate experience at Lovells – including a stint as managing partner of its Asia practice, with seven offices scattered across the continent.

And yet he was leaving to head up the Africa group at a native South African firm with no foreign offices. It seemed an unlikely fit.

But maybe he saw something the eyebrow-raisers had missed: 10 months on the firm boasts a London office, and according to some in-house lawyers, a very attractive pan-Africa offering. So much so that McKean sees a parallel with his former job.

“It’s very similar to Hong Kong when doing deals into China: clients are more confident using a firm in a first-world system.”

A natural gateway

As more and more international investors eye up Africa, McKean says that South Africa’s relatively advanced legal framework compared to its neighbours has positioned the country as a natural gateway into Africa.

Eversheds last week brought more credibility to the idea of South Africa as a hub for African work when it announced a link-up with local firm Routledge Modise. In its media statement, Eversheds declared it wanted to provide advice to clients in South Africa and “throughout the continent”.

One in-house lawyer at a UK financial institution said a team of its lawyers had recently been sent to Johannesburg. Their conclusion was that legal advice in Africa is unusually hard to source, and the best way to do the region’s work is to do it out of South Africa.

McKean says his firm has had enquiries from banks and corporates who have used Webber Wentzel for South African work and want to employ it to manage deals across sub-Saharan Africa.

Terry Mahon, chairman of Routledge Modise, says its expansion into regional work was more a result of what its clients were doing than of its boardroom strategy.

“It’s important to our clients to expand through Africa and they’ve taken us with them,” says Mahon. “It’s not something we decided to go out and do.”

French connection

The traditional challenge for South African firms has been the fact that most deals in Africa are done under UK or French law. This has meant the large UK firms have tended to do a lot of the work for the international corporates, albeit on an ad hoc basis.

Mahon says Routledge Modise’s agreement with Eversheds has instantly boosted its ability to advise in UK and French law. This, he says, gives it the ability to work across Anglophone and Francophone Africa, providing a genuine alternative to the magic-circle firms not only for quality of advice but also where it matters most: price.

South African firms can offer clients sophisticated legal advice at much cheaper rates than the London firms – and, perhaps surprisingly, some local African firms.

“What the local firms charge is not related to their local cost of living; it’s tied in to the European and US rates,” says Mahon.

Roddy McKean at Webber Wentzel says that apart from advancing its UK and US capabilities, the firm is trying to develop closer relations with local firms in sub-Saharan Africa. Part of this strategy is the secondment of lawyers to local firms and vice versa, to boost the regional experience of lawyers in its network.

McKean admits that not every company is convinced that Webber Wentzel’s model is the best, preferring to use the UK firms by default. But he plans to overcome this through prolific networking, and show potential clients that South Africa has the skills and low cost base to do regional work both cheaper and more effectively.

With Chinese and Indian investment into Africa continuing apace, it’s unlikely that eyebrows will be raised if other South African firms develop a similar strategy.

Tags: Corporate, Africa, Expansion and strategy, South Africa, Features, Webber Wentzel, Eversheds