Global law firms have recently flocked to South Africa, a trend fueled by a more open post-apartheid economy that has shaken up a legal market previously dominated by domestic firms.
As financial sanctions lifted after apartheid’s end in 1994 and South Africa’s economy opened, multinational companies looking to do business in the country and elsewhere in Africa found themselves in need of sophisticated legal services.
“The legal sector was obviously affected by the opening up of the economy. That created a lot more work opportunities,” says Peter Leon, a Herbert Smith Freehills partner and global co-chair of the firm’s Africa group. “A lot of multinationals started working there; companies became more sophisticated in their use of legal services.”
In the recent past, those overarching economic changes have paved the way for a clear impact on the legal sector, which has seen an influx of global law firms, many of them with U.K. roots.
“In the last four to five years, that’s been a game-changer,” says Leon, who previously practiced at Webber Wentzel, one of a small group of leading South African firms now competing against the international firms. “It has given the local firms a bit of a shock, and it’s created some competition that wasn’t there before.”
White & Case became the first international firm to open an office in Johannesburg in 1995, laying out a path that a number of other firms have since followed. A flurry of new entrants have joined the South African legal market since 2014, when Allen & Overy, Clyde & Co and Dentons all opened offices in South Africa. Herbert Smith Freehills and DLA Piper followed suit in 2016, hiring big-name partners from local firms, while Pinsent Masons, a global firm based in the U.K., opened a South African office in 2017 with a focus on infrastructure.
That injection of global players has come as international companies have increasingly eyed South Africa—and the African continent more generally—according to lawyers who’ve practiced in the region for years. Among other areas, international and global firms compete for mergers and acquisitions work in South Africa, while project finance and infrastructure-related work keep lawyers busy elsewhere on the continent.
Johannes Gouws, DLA Piper’s country managing partner in South Africa, says most international entrants have focused on hiring experts from some of the large local firms. In addition to Webber Wentzel, those firms include Bowmans; Cliffe Dekker Hofmeyr; ENSafrica; and Werksmans. In response, he says, the local firms have adjusted.
“The biggest [recent trend] has definitely been the entry of the international law firms,” Gouws says. “That has obviously been a disruptor in the market, because all these firms have hired the bulk of their lawyers from other South African firms.”
As for what’s driving global firms toward South Africa, Gouws notes that in many instances, international firms have entered the market based on necessity. Specifically, as global clients expanded their business in the country and elsewhere on the African continent, they needed on-the-ground legal expertise.
“If you say to your clients, ‘Africa is important,’ you have to have a presence here in South Africa,” he says.