Hogan Lovells announced Tuesday it is merging with 120-lawyer South African firm Routledge Modise in a move to establish its first outpost in that hot legal market.
The addition of the Johannesburg-based firm, effective Dec. 1, will greatly expand a Hogan Lovells Africa practice that already includes roughly 40 lawyers concentrated mostly in London, Paris and Washington, D.C., but which hadn’t featured an actual office on the continent until now. Among the 120 lawyers in Routledge Modise’s single office are 40 partners who focus on corporate, commercial, litigation, mining and employment work.
Hogan Lovells co-CEO J. Warren Gorrell Jr. tells The Am Law Daily that the merger is client-driven, as a majority of Hogan Lovells’ top 200 clients have operations on the continent and those clients often have regional headquarters in Johannesburg. “The thinking here is: clients increasingly would like us to have an on-the-ground presence in Africa, even though the work is done in many different countries,” Gorrell says. “South Africa really serves as a gateway into Africa and would be the base from which we want to continue to develop our practice there, and really across sub-Saharan Africa.”
Though Gorrell declined to name specific clients who are likely to tap the Johannesburg office for legal work, he did say those clients touch a wide range of industries that include energy and resources, financial services, projects and infrastructure, and telecommunications, among others.
“This is a good way for us to continue to build on the work we have in Africa—[to] expand on our existing clients—and also to help serve clients that Routledge Modise has that are outward-looking beyond South Africa,” Gorrell says.
Routledge Modise chairman Lavery Modise added in a statement: “Both firms have proven track records. This is a merger of expertise and knowledge to ensure we continue to offer our clients the very best legal services.”
Routledge Modise was formerly in a formal alliance with U.K. firm Eversheds, but the two split ways in October 2012 as a result of client conflicts, according to Legal Week. The firms’ partnership was also marred by a long-running legal battle with The Law Society of the Northern Provinces over whether or not Routledge Modise was allowed to operate under the Eversheds name, with a South African court eventually ruling in favor of the name change.
Because of that court decision, Gorrell says he does not expect any legal obstacles in Routledge Modise’s planned rebranding as Hogan Lovells—set to take place early next year, according to the firm. (Gorrell says the delay between the merger and the name change is simply a matter of ensuring a smooth transition.) Despite the rebranding, though, the office will financially operate as a standalone firm once the merger is complete, in accordance with South African regulations that prohibit law firms from sharing profits.
Gorrell says Hogan Lovells began talking to Routledge Modise late last year about a possible tie-up. Gorrell says it was important that Hogan Lovells launch in the region with a proven entity on which it could quickly expand upon, as opposed to opening a new office with cherry-picked groups of local attorneys. “We spoke to a number of firms and lawyers and basically felt that [Routledge Modise was] a really good fit.”
Hogan Lovells has more than 40 offices and associated offices worldwide. The firm placed seventh in The American Lawyer’s most recent Am Law 100 ranking with gross revenues of $1.63 billion and profits per partner of nearly $1.1 million in 2012.
Gorrell says Hogan Lovells does not currently have its sights set on any other African cities as locations for new offices, but the continent has remained a hot destination for a number of international firms in recent years. The Am Law Daily wrote last year that Africa had emerged as “the last great law firm frontier,” as firms such as Allen & Overy, Baker & McKenzie, Clifford Chance, Herbert Smith (now Herbert Smith Freehills), Linklaters and Norton Rose (now Norton Rose Fulbright) were among those rushing to put up stakes across the continent, whether by way of mergers or the lateral market. And, last fall, The American Lawyer took an in-depth look at the legal market in South Africa specifically, noting how a changing legal landscape and a booming economy has proven to be a boon to independent local firms as well as a shiny lure to international firms looking to expand.
Recently, Eversheds was reported to be interested in a major African expansion of its own, following its falling out with Routledge Modise. The firm is eyeing potential office launches in Ghana, Kenya, Morocco, South Africa and Tunisia, according to Legal Business.