AFRICAN LEGAL MARKET WORLD SERVICES GROUP AFRICAN REGIONAL COUNCIL MEETING NAIROBI KENYA A PRESENTATION BY DR.EVE HAWA SINARE REXATTORNEYS

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2 AFRICAN LEGAL MARKET WORLD SERVICES GROUP AFRICAN REGIONAL COUNCIL MEETING NAIROBI KENYA A PRESENTATION BY DR.EVE HAWA SINARE REXATTORNEYS 2

3 3 AFRICAN LEGAL MARKET INTRODUCTION When I was asked to present a paper on the African legal market, I thought that it would be impossible for me to do so in the time available. The reason is that Africa is a very large and diverse continent with three different legal systems common law based (most of the English Speaking Africa),

4 4 Dutch Roman( South Africa, Namibia, Lesotho, Swaziland, Zimbabwe etc ), Continental ( civil lawcomprising French Speaking Africa) and systems that are in between ( Ethiopia, Sudan, Somalia) However, Rexattorneys is a member of Lex Africa which is an African legal network of premier law firms mostly in English speaking African countries, so I thought I could speak from the experiences we have had about Africa in Lex Africa generally and specifically from Tanzanian experience.

5 5 AFRICAN FIRMS GENERALLY With exception of South Africa African Firms are: typically small Less specialized weak in financial management weak in marketing Weak in continuing legal training of their lawyers weak in mechanization of accounts and management Weak in incentivizing partners and lawyers on performance base remuneration

6 6 The economies in Africa are growing and expanding and so is the demand for a variety of commercial legal services some of which the local firms have no experience in. International law firms have contributed in working together with local law firms. International law firms approach to Africa differ: direct association with a local law firm by country A non-exclusive working relationship

7 7 indirect through established South African law firms which have established associations in Africa. An African based intra-african legal network developed through the African Legal network headquartered in Kenya which could rival the international law firms in Africa. Network route both continental and international (i.e WSG and Lex Africa)

8 8 LEGAL MARKET IN TANZANIA The number of local corporate law firms in Tanzania has grown substantially from the only one law firm available in the mid-1970s to over 10 law firms that can deliver a level of quality of services that are internationally competitive namely: Rexatorneys Mkono & Co Advocates IMMMA Advocates Adept Chambers Ako Law Law Associates FK Chambers

9 9 CRB Africa Legal Anbery & Company Advocates M.A Ismail & Co Advocates Kesaria & Co. Advocates Asyla Attorneys Hall Mark Attorneys Mawalla Advocates Law Castle Advocates

10 10 TIE-UPS WITH INTERNATIONAL LAW FIRMS Tanzania legal market represents all the shades of international law firm local law firms relationships. Present in Tanzania are the following tie-ups: DLA Piper SNR Denton Deyniz Reitz- Africa Legal which is a tie up with Norton Rose

11 11 Clydes African Legal Network based in Kenya The continental and international legal networks Law firms without bilateral tie-ups at all and not members of any international legal networks

12 12 BENEFITS AND DISADVANTAGES OF EACH The Networks: Networks deal with the issue of quality as they choose premier law firms to be members thereby ensuring that clients receive competent legal services across the network membership Addresses the issue of number of qualified experts in any legal sector although that advantage is limited by distance as lawyers in the network reside outside the local area. One of the limitations in Tanzania is where there is a large assignment that requires several qualified lawyers often law firms cannot field enough number of lawyers

13 13 Do not address the issue of marketing on a one on one basis as would international law firms. Marketing is expensive but also it is about knowledge of how to market a law firm and where Do not address the issue of market standardized documentation especially in the financial sector where syndications use market developed documentation

14 14 do not address continuity of quality as the network does not deal with training of younger lawyers. Given the poor quality generally of legal training in the country, continuous education of lawyers is key to maintaining the premier quality of law firms Do not address the one key reason law firms fail to expand namely accounting and financial management systems supported by mechanization

15 15 Do not provide occasional local presence which is huge in providing upmarket visibility within the countries

16 16 Direct Associations: Some do address issue of quality by having a legal training program of exchange of their lawyers. This is visible in the case of the Clyde/Ako association but not so for the other associations If exclusive limits the number of international law firms that the local law firms can work with in large assignments

17 17 Provides a marketing advantage as the international law firms market them when marketing themselves but some of the marketing oversell the local firms than the expertise such local firms clearly have gain for local associates, preference by clients who mostly are foreign investors from same or like countries as the lawyers from the international law firm

18 18 Has the potential for systems integration and mechanization Has the potential for advantage of systems management Has the potential for accounting software adoption and transfer of financial management Has the potential for more efficient billing

19 19 Non- exclusive Working Relationship: deals with the issue of quality as they choose premier law firms in each country to provide services thereby ensuring that clients receive competent legal services has the flexibility of using different law firms in the same country depending on specialty requirement of an assignment has the flexibility to work with several different international law firms for large and complex assignments

20 20 Does not address the other needs such as the need to continue training of lawyers Does not assist in standardized documentation especially in the financial sector Does not have marketing benefit No benefit in accounting systems or financial management or mechanization of work processes

21 21 Does not provide the permanent or occasional local presence

22 22 Indirect through South African Firms: The benefits and disadvantages are the same as direct associations. The advantage is that the merger of Norton Rose and Denyz Reitz provided Norton Rose with established associations in several African countries.

23 23 African Legal Network established by a Kenyan law firm has expanded rapidly in Eastern and Southern Africa and Mauritius: The benefits and disadvantages are similar to those for direct associations and legal networks.

24 24 Not associated with any international law firm: In Tanzania the majority of the firms listed herein do not associate with any international law firm and are doing very well. It will take a long time for most to feel the need to associate with international law firms. Law firms that depend on international investors need associations with international law firms and need to market themselves internationally.

25 25 The key Disadvantage for all the different types of associations namely the financial benefit. the associations largely benefit the international law firms financially more than they do the local firms. A working relationship that will have a winwin situation is yet to emerge as long as the international law firms are not permitted by law to establish themselves or become partners in local firms.

26 26 RESTRICTIVELEGAL AND REGULATORY REGIME There are no limited liability partnerships in Tanzania and the number of partners cannot exceed 20. Only Tanzanians can be partners in a law firm. There is no legal regime for foreigners practicing foreign law in Tanzania and no provisions for foreigners to be attached to a firm for a while prior to taking admission exams and be admitted on the roll in Tanzania.

27 27 Yet economic reforms in Tanzania necessitated the establishment of a reformed legal regime in areas that were not familiar to locals which allowed for foreign lawyers to be let in on transactional basis and out once the transitions were completed. Changing law in Tanzania so that law firms can be with limited liability or lawyers can provide legal services through companies limited by shares will help grow law firms in Tanzania.

28 28 I am a believer of benefit in exposure and interactions between local law firms and International law firms and for that matter the permission for foreign law firms to set up in Tanzania whether in conjunction with local firms or without will only benefit the local lawyers and clients. The Tanzanian market is expanding rapidly and the demand for complex legal services will continue to grow as the business deals grow in size and volume.

29 29 CONCLUSION The African legal market has huge potential for growth that can be exploited well if local firms expand beyond their current sizes and one way to achieve that would be addressing the key issues of financial management, mechanization, performance based remuneration and training which can also be achieved through working with foreign law firms. END

30 30 Over the years local Tanzanians have gained the necessary skills and would be quite capable of providing quality services The Government has been slow in recognizing this fact so the main contracts are still outsourced with local support

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