Africa's gold and oil resources represent attractive business opportunities for city law firms. Jon Robins assesses their impact.

With more than one billion people watching Live8, some ten million Brits wearing 'Make poverty history' wristbands in sympathy with Africa's plight, and G8 leaders attending a summit to discuss Third World debt this time last year, the continent has certainly been pushed into the public's consciousness.


Of course, the troubled region has been on the legal community's radar for a lot longer, but a new scramble for Africa appears to be under way among City law firms. Most recently UK/US firm DLA Piper Rudnick Gray Cary announced that Tanzanian law firm IMMMA Advocates had joined its network (see 2006 Gazette, 8 June, 8). 'We want to be seen over the coming months and years as a leading international law firm doing business in Africa,' explains Grant Henderson, an African specialist with the firm. 'The only way to do that is from the ground up, and by really understanding the jurisdictions.'


IMMMA, which has six partners and is based in the commercial hub of Dar es Salaam and the city of Mwanza, is the fourth African law firm to join the alliance, following Chibesakunda & Co in Zambia, which joined in March, Cliffe Dekker in South Africa and DLA Matouk Bassiouny in Egypt. According to Mr Henderson, the firm is looking closely at Nigeria, Mauritius and Kenya as well.


Why set up in Tanzania? 'The country is developing fast. It has commercial importance both regionally in east Africa and internationally, with its status as a leading gold producer,' says Charles Morrison, DLA's lead Africa partner. The country 'is a politically stable, common-law based jurisdiction where it is possible to do well-structured projects, finance and trade deals', he says.


Similarly, Denton Wilde Sapte has also been increasing its presence throughout the jurisdictions. The firm now has an association with five local law firms across the continent - with Collins Newman & Co in Botswana; Bentsi-Enchill & Letsa in Ghana; Mkono & Co in Tanzania; Kampala Associated Advocates in Uganda; and Corpus Globe in Zambia. It launched a service arm in Johannesburg in April, and is on the lookout for a formal alliance in Nigeria.


Africa is a key part of the firm's international development strategy, reckons Howard Barrie, a project finance partner. Why? 'Many of our competitor firms have focused substantially on developing western Europe, eastern Europe and the Far East, as well as north American strategies. We have focused on developing our natural and historic practices in energy, infrastructure and finance where we have already been doing a lot of work in emerging markets.' The firm has 28 lawyers working on African-related projects.


'If you have aspirations to be a truly global law firm, I think Africa is an important part of the jigsaw,' says Mr Henderson. 'It is certainly attracting a lot of attention with the G8 over debt relief, recognising that alleviating poverty will make ordinary Africans' lives better. But it's not just about debt relief - a lot of work can done out there. There are already a significant number of large multinational corporations doing business in Africa with others looking at it, especially when you consider the number of infrastructure developments. But there are only a handful of law firms with an active African strategy.'


'We see Africa is a very important market for us,' acknowledges Charles Jacobs, a Linklaters partner based in London. 'We've been there a long time and the partners are well known in Africa... I do not know if it has anything to do with Bob Geldof, but the rest of Africa has become very fashionable. Places that companies weren't willing to invest in even five years ago have now changed.' He adds that his own firm's relationship with the continent pre-dates the latest flurry of interest, and has been bolstered by a series of South African lawyers - such as himself - who have been made partners in the firm.


'If you go back to the old mining days, pre-apartheid, it used to be that five companies controlled 75% of the Johannesburg Stock Exchange, such as Anglo American and Old Mutual. Linklaters has acted for most of those companies,' Mr Jacobs says. He points out that when six major South African companies redomiciled from Johannesburg to the London Stock Exchange in 1997, the firm acted for each of them. 'A newspaper article appeared in early 2000 saying "Will the last company to leave Johannesburg please turn the lights off?"' he recalls. Currently, Mr Jacobs reports that the firm is doing a lot of work in the Democratic Republic of Congo on mining, as well as oil-related work in Angola and Namibia. It is also busy with telecoms clients and acted for the mobile operator Celtel - which has 13 sub-Saharan mobile licences - on its $3.4 billion (£1.8 billion) sale to MTC in March last year.


The enthusiasm of the City for Africa does not necessarily mean that life is any easier on the ground, and the various bar associations remain wary of international competition. 'By and large, UK law firms tend to think about the political situation and then the economic situation as indicators as to whether they go into a country,' reports Nankunda Katangaza, the Law Society's Africa and Middle East policy officer. 'But many of the jurisdictions are quite protectionist, which tends to make life difficult.'

There are signs of increasing liberalisation, however. Ms Katangaza points out that the East African Law Society, which represents lawyers in jurisdictions such as Uganda, Tanzania and Kenya, has been actively talking about cross-border practice. Similar discussions are occurring within the Southern African Development Community. But she maintains South Africa remains 'a hard market to crack, and extremely protectionist'.


Ms Katangaza explains: 'In South Africa, [the bar] does not allow foreign lawyers to go into partnership with domestic lawyers. Domestic lawyers are not allowed to hire foreign lawyers and even if the foreign lawyer hires a domestic attorney, they lose their higher rights of audience and so it becomes pointless having them in their firm.' She says South Africa has made a recent offer as part of the GATS process (the World Trade Organisation's general agreement on trade in services) no longer to restrict partnership between foreign lawyers and domestic lawyers. 'So the regional groupings are now looking hard at putting cross-border practice into place,' she says. 'If east Africa does that and South Africa does that, then it is only a matter of time before southern Africa allows east African lawyers to practise, and then there will be a movement to make it more internationally open.'


She sees recent mergers, such as that between South African firms Edwards Nathan and Sonnenberg Hoffmann Galombik, announced last month and expected to take place later in the year (which would create a practice of 275 lawyers), as preparation to compete with what might be coming from abroad.


Libya has become a surprising target for the attentions of UK firms since the UN lifted sanctions in 2003, following Libya's agreement to disband its weapons programme and settle disputes surrounding the Lockerbie bombing. Paul Phillips, a London partner at Stephenson Harwood, has been dealing with the country since 1989 and represented the second accused, Al Amin Khalifah Fhimah, in the Lockerbie case. He was acquitted.


'The country was under sanctions then and had been under sanctions since 1989,' he says. 'To understand the country and the problems that it has suffered, leaving aside its external reputation, you have to appreciate that it was operating almost entirely under a political blanket for the best part of 15 years.'


Much of his work involves inward investment. He also recently acted for one of the African airlines blacklisted from landing in Europe over concerns about their safety, and is involved in a project run by the Law Society and General Planning Council in Libya to propose amendments to the country's legislative framework, particularly in the corporate, commercial and banking areas. It was set up last year at the request of the Libyan government and the British ambassador in Tripoli.


Anthony Giustini, a Paris-based Clifford Chance partner, also notes that Libya is opening to foreign investment. 'The Libyans themselves do not need any money, they have tons of it. It is a small country with tremendous oil resources. But where Libya will get interesting - and why we're watching it - is what happens when the foreign investors return,' he says. 'But there is a lot that still has to happen. Law and the lawyers were jettisoned some ten or 15 years ago, and the legal framework for investment is very weak. The idea of the need for a lawyer to mediate between you and the state was deemed undemocratic. The legal profession was effectively decimated and there's a generation of lawyers missing.'


Mr Giustini spends about 70% of his time on African clients and is currently working as lead counsel to the Canadian group CIC Energy Corp in what is thought to be one of the biggest power deals agreed on the continent, to create an integrated coal mine and power station in Botswana.


Mr Phillips reckons that there are 11 or 12 law firms serving Libya's population of 5.5 million. So what is the best way of pursuing an African strategy - to shuttle in expertise, or establish a presence on the ground? 'We don't see a need for an office, and we talk with clients a lot about it,' says Mr Jacobs. 'We service deal-to-deal, and parachute the right teams in from London and Paris and elsewhere in our network. What you can't do is come in and be the local lawyer.'


'Our relationships are based upon mutual co-operation and advantage. We aren't trying to replace local law activity,' insists Mr Barrie. 'Rather than being an international law firm that is trying to land somewhere and scoop up the local work, and destroy the local bar, we are effectively seen as a supporter of existing local law firms.' As Mr Henderson puts it: 'We believe we will win more work, and are winning more work, by being able to demonstrate to our clients that we understand the jurisdictions we are in and we are hoping to be in.'


Jon Robins is a freelance journalist