Johannesburg, South Africa
While a number of high-profile law firms have made recent inroads into the African legal market, including Allen & Overy and Chadbourne & Parke in the last few months alone, the perception among African lawyers is that global firms do not fully comprehend the realities of doing business in their country.
As reported in The Lawyer, “Research carried out by consulting company Redstone shows that while global firms have woken up to the need to manage their African capabilities in a more organised way, African law firms still believe that their international referral partners lack knowledge and understanding of their markets – although the South African market is now well-understood.”
Many surveyed also noted that despite their firms’ capabilities and streamlined cost bases, international firms often continue to cast their relationships with African firms as a subcontracting arrangement. Interestingly, although referrals from international firms can comprise as much as three-fourths of the African firms’ revenue, none of surveyed attorneys said they would refer work outside their own jurisdiction to a global firm. Rather, most would prefer to refer it to another African firm, or do it themselves.
The Lawyer notes that UK firms still dominate the market, “but Redstone discovered that US firms have significantly geared up to handle African work in the last 18 months. A number of US and global firms interviewed for the study said that their executive management teams had decided to appoint partners to focus specifically on Africa in order to maintain their market position on the continent.”
Redstone further reported that roughly 50% of the African firms interviewed which are not currently in some sort of pan-regional network envision joining such an organization within a few years. With the rise in interest among global firms of having a presence on the continent, many African firms foresee collaborating with an international outfit.
The Lawyer quoted Redstone consultant Stephen Blundell, “African firms are ambitious and have invested considerable time and expense into considering their own strategy. They’re experiencing the challenges of rapid growth and change. They want to preserve their distinctive cultures, whilst improving management structures, accountability and systems.”
Redstone interviewed 15 global firms and 36 African firms from 12 jurisdictions between October and December 2014.
