Partner & Head of A&O’s Africa GroupA&O: 1993-present
Senior AssociateA&O: 2008-present
Senior AssociateA&O: 2015-present
Active in Africa for more than 30 years, A&O has stepped up activity in the last decade, opening offices in Casablanca and Johannesburg and building a network of ‘best friend’ relationship law firms. It puts our Africa Group in a strong position as the continent increasingly engages with the world economy.
Africa is a continent on the rise. It boasts a fast-growing middle class and rapid urbanisation. Major infrastructure projects in every sector from power to telecoms are providing a solid foundation on which African economies can build. According to the Financial Times, six of the ten world’s fastest-growing economies last year were African.
Up and down the continent, the changing environment is encouraging enterprise. Africa is attracting investment, both from within the continent and internationally. In short, huge opportunities exist for business and therefore for legal advice.
Allen & Overy was among the first major law firms to identify the continent as an opportunity. Tim Scales, head of the firm’s Africa Group, says: “Since the global financial crisis, attitudes to investing in Africa have evolved significantly. With previously safe-haven investments in stable markets such as Europe looking more risky, investors have been reassessing the benefits of investing in Africa.
“At the same time, a number of African governments have been proactively facilitating private investment, particularly in the power and infrastructure sectors. Governments have looked to create a legislative, regulatory, fiscal and contractual framework to enable and encourage such investments. All of this provides considerable scope and opportunity for a law firm such as ours to advise clients across all our major areas of practice.”
The number and range of investors have expanded both at an international and local level. “While China has dominated in recent years, there is now growing interest from India, Japan, Korea, the Gulf and Latin America, as well as Europe, the U.S. and Australia,” Tim says. “Institutional investors and specialist funds are also looking for new assets, which is leading to a growing secondary market for these assets. Again, we’re ideally placed to assist.”
The Africa Group comprises more than 150 lawyers across Africa, Europe, Asia Pacific, the Middle East and the Americas. The breadth of A&O offices and practice areas involved in Africa marks the firm out from its competitors. “Having lawyers from across the A&O global network engaged on African matters reflects both the international interest in Africa as an investment opportunity and our strategy of being able to serve clients, wherever they’re based and whatever their business, as one firm,” Tim continues.
In addition, A&O has nurtured relationships with the leading law firms in each African jurisdiction to create a powerful network. Cooperation extends beyond working together on cross-border deals into many other areas of joint engagement, including training, providing relationship firms with access to know-how and secondments.
The firm has also taken the lead on a number of interesting initiatives to help build capacity in the legal sector on the continent. These include training judges and offering development training for junior and prospective partners, as well as equipping libraries with legal texts and books.
One initiative involved co-hosting, with the African Development Bank and others, a two-day training course for lawyers in November 2018 in Abidjan, Ivory Coast. This training brought together 40 lawyers from 25 firms in 15 Francophone African countries; the A&O team included people from the London, Paris, Casablanca, Madrid and Johannesburg offices. The programme was conducted in French and included both technical and business skills modules.
Establishing a concrete presence
A&O established a presence on the continent when it opened an office in Casablanca in 2011, becoming the first Magic Circle firm to do so. The aim of opening the office was to serve both the local market and the rest of Africa, particularly the Francophone jurisdictions.
Eight years on, the office’s managing partner, Hicham Naciri, says the office has more than achieved its early objectives. Morocco is a healthy jurisdiction in its own right, benefiting from a stable political environment, a good location, a dependable market for inward investors and a maturing legal environment. The firm has landed many prime mandates, including advising on several aspects of the biggest power project in Morocco. The office has also led, or been involved in, a range of deals across the rest of Africa to the point where it derives about 40% of its revenues from work outside Morocco.
At the end of 2019, the office had 25 fee earners, including three partners. About 90% of the fee earners were Moroccan and more than half were female.
The practices are broadening to include Capital Markets, Infrastructure and Arbitration. Antoine Haddad, who was based in the Paris office for ten years and was made partner in 2018, relocated to A&O’s Casablanca office and is now building the Project Finance practice. “We have focused on projects in the mining and infrastructure sectors, at least initially, and our aim is to diversify the range of clients for whom we act, both domestically and internationally,” Antoine says. It is to the firm’s advantage that he, like the majority of the team, speaks English, French and Arabic.
Hicham emphasises how well the Morocco office has integrated with the rest of the firm. “What’s particularly gratifying is the two-way referrals process,” he notes. “In the early days, the focus was more on referrals coming from the rest of the network, on top of winning business locally. Now, we’re originating deals in Morocco that are either English law-governed or require specific expertise (capital markets, projects, arbitration, and so on) and need the collaboration of offices from around our network.
“That underlines the strength of our international network and puts us in an optimal position to win increasing amounts of Africa-related work.”
The Morocco office has also played its part in promoting the rule of law and good business practices through its interaction with, and support of, institutions such as the Organisation for the Harmonisation of Business Laws in Africa (OHADA). OHADA, the French acronym for Organisation pour l’Harmonisation en Afrique du Droit des Affaires, was created in 1993 to guarantee legal and judicial security for investors and companies in its 17 member states.
Johannesburg, South Africa
A hub for investment
As the Casablanca office celebrated its eighth anniversary, the Johannesburg office celebrated its fifth. The latter was set up in 2014 to capitalise on South Africa’s position as a hub for investment in sub-Saharan Africa, its major importance as a regional financial centre and as a complement to the Casablanca office giving the firm a concrete presence in both northern and southern Africa.
During those five years, the office has grown significantly to four partners and about 40 lawyers, including secondees. In 2017, it scored a coup by taking on a 12-strong litigation, arbitration and regulatory dispute resolution team, headed by Gerhard Rudolph. Gerhard has been ranked as a leading dispute resolution lawyer in legal directories for more than a decade and is also regarded as one of the leading construction law specialists in South Africa.
The arrival of Gerhard and his team forced a further physical expansion, the Johannesburg office having already moved into new office space in September 2015.
The scope of the office practices has also expanded, from being focused on banking, energy and infrastructure projects to include debt and equity capital markets, tax, corporate and regulatory advice, as well as expertise in mining and commercial land matters. Many of these practices now rank in the top tier.
“It’s amazing how quickly we established a foothold in the market,” recalls Lionel Shawe, the office’s managing partner. “When we opened, we were a very small team and, even though we all had our practices and clients, we knew we’d have our work cut out convincing the market that we were a force to be reckoned with. It’s a tribute to everyone that we’ve done just that.”
Not that it has all been plain sailing. Lisa Botha, a Banking partner who helped open the office, notes the increase of distressed asset transactions. “That trend is indicative of some of the challenges facing business in Africa,” she says. “There have been plenty of successes, but as the business environment develops, it’s perhaps inevitable that you’ll get businesses that hit hard times. My sense, however, is that business is maturing and it’s very exciting to be part of that process.”
Kathleen Wong, a trilingual Canadian lawyer who moved to Johannesburg in 2016 after spells in the London, Singapore and Shanghai offices, focuses her practice on banking and finance deals for international and regional lenders and Africa-based borrowers. She also represents a number of Chinese clients. The mix of her varied practical and cultural experience, combined with the prospect of building her practice in a new market, was what drew her to South Africa.
“It’s been a great opportunity to bring all my different worlds together,” Kathleen says. “It’s everything you might expect of an emerging market, with top-quality deals alongside a number of challenges. Every day brings something different. I hope I’ve brought a new dimension to the office, and added to the diverse, multicultural environment.”
As Kathleen notes, a key to operating successfully in Africa is being alert to cultural differences and sensitivities. It’s more important here, for example, to conduct business with face-to-face meetings. One of the hallmarks of A&O’s approach to building its Africa practice is active encouragement of in-country trips, an aspect of Kathleen’s work that she particularly enjoys. “Distances are often great and so travelling takes time,” she says. “However, it’s absolutely worth the effort. People you meet appreciate that you’ve taken the trouble to visit them and get to know them.”
Operating in South Africa brings a responsibility to contribute to the development of a free and fair society, to ensure that individuals who were previously disadvantaged have the opportunities that they were deprived of during apartheid. A powerful way to contribute (encouraged by the government) is to support local entrepreneurs who provide the office with services and products, such as catering and general office supplies.
The office has supported a mother-and-daughter catering firm since 2015. As the relationship developed, the small firm expanded and took on two other chefs as permanent employees, as well as countless temporary staff. The office’s support enabled the pair to build an industrial catering kitchen and buy a delivery vehicle. They’ve even won new clients on the strength of the food served in the office’s boardrooms.
The office has also been able to support a second emerging business by appointing a ‘master supplier’ to relieve the office manager and COO of the task of buying in consumables, from stationery to the biscuits for the boardrooms. This supplier, who struggled with unemployment, now has a thriving business that provides services to some of the office’s other suppliers, too. He has also been able to employ two more people.
A platform for further growth
Tim expresses satisfaction with the progress of the offices on the continent and the Africa Group more broadly. “We’ve definitely benefited from having a presence on the ground with our two offices, from the relationships we’ve developed across the continent and, particularly, from the coordination across the network,” he says. “Our investment in Africa has led to a three-fold increase in revenues from Africa-related matters over the last five years.
“The potential in Africa remains enormous, and we’ll continue to strive to be at the forefront of developments.”
Tim notes that the goal is to continue to expand the areas of expertise, highlighting the opportunities in private equity, while Gerhard sees significant scope in taking on pan-African disputes.
Laura Pyke-Jean, Head of Marketing & Business Development – Middle East & Africa, observes: “There’s an extraordinary energy and enthusiasm about the opportunities coming up, not just within A&O’s Africa Group internally, but also running through our ongoing conversations with law firms across the continent.
“We’ve established relationships in every jurisdiction with more than 100 firms currently on our roster; many of them attend our GEMCon global relationships conference every year and have done so since we first organised it in 2008. This event, sometimes described as the United Nations for lawyers, is a great example of how we work as a team with the leading law firms across the continent to continually improve the service we deliver to clients in Africa.”
Advised the consortium of lenders on a USD750 million financing of a greenfield bauxite mine in Guinea. The USD1.4 billion project involves the development, construction, financing and operation of the mine, together with associated rail, port and marine infrastructure in the Boké Province in northwestern Guinea. The deal involved seven A&O offices across six countries advising on the financing.
Advised the lenders on the development and project financing of the Coral South Floating LNG (FLNG) project in Mozambique. The USD5bn deal is the first project financing for an FLNG development anywhere in the world, Mozambique’s first LNG project and Africa’s largest-ever project financing. The deal involved ten A&O offices across Asia Pacific, the Middle East, Africa, North America and Europe.
Represented Industrial and Commercial Bank of China on a USD300m loan to Transnet SOC. The agreement was signed as part of the high-profile 2018 BRICS summit and witnessed by the presidents of China and South Africa.
Advised the Africa Finance Corporation on its joint venture with the Pan African Infrastructure Development Fund to create a new energy entity combining renewable and non-renewable power-generating assets in Africa. The joint venture merges interests in assets in Nigeria, Kenya, South Africa, Ghana and Cape Verde. The A&O offices involved were Johannesburg, London, Abu Dhabi and Belfast.
Advised Saham Group in connection with the acquisition by Sanlam Emerging Markets Ireland Limited of a 100% interest in Saham Finances, Saham’s insurance group, for USD1.05bn.