(Faigl.landislav / JCRules / Wikimedia)
In a move that makes it the latest large international firm to bet on Africa’s growing economic prowess, Dentons announced Wednesday it will open offices in Cape Town and Johannesburg by joining forces with South African alliance firm KapdiTwala.
Dentons plans to launch another outpost in Francophone Africa later this year. The Global 100 giant, which is the product of a three-way tie-up last year between SNR Denton, Europe’s Salans and Canada’s Fraser Milner Casgrain, recently made waves by expressing interest in joining forces with Patton Boggs. Dentons’ latest quest for growth has led it to a region that many consider the final frontier for large firms.
“The legal profession and their corporate clients are looking for growth,” says Thomas Laryea, the Ghana-born chair of Dentons’ Africa practice. “This is a tremendous move for our firm and our global clients, as we’ll now have a true integrated presence on the ground that can offer both international and regional expertise.”
The deal unveiled Wednesday effectively ends Dentons’ association with South African firm Glyn Marais—a relationship that began before predecessor Sonnenschein Nath & Rosenthal combined with British firm Denton Wilde Sapte in 2010. KapdiTwala, a Cape Town–based energy law boutique, joined Dentons’ Africa referral network in September 2012.
Laryea, who spent 11 years as an assistant general counsel for the International Monetary Fund before joining Dentons in June 2011, spoke with The Am Law Daily from Washington, D.C., where he was attending the IMF’s spring conference. He says KapdiTwala will operate under the Dentons South Africa name, but will not be financially integrated into Dentons’ Swiss verein structure.
Instead, Laryea says that Dentons—whose U.S. arm saw gross revenue remain flat and profits per partner increase slightly in 2013—has set up a “collective investment vehicle” in South Africa to manage its new local offices’ operations. The Cape Town base is already open and the Johannesburg branch will open later this year.
While Dentons has a broad African alliance network of 20 firms, its office in restive Cairo has until now been the only location on the continent operating under the Dentons name. (The location and structure of Dentons’ future base in Francophone Africa, a region where French firms have traditionally held sway, has not yet been disclosed.)
In the press release touting the South African move, Dentons states that five-lawyer KapdiTwala will continue to be owned by its partners and led by current managing partner Noor Kapdi, an oil and gas expert who founded Illumiknow Consulting and serves as a director of the South African Oil and Gas Alliance. KapdiTwala and Dentons share a key client in French energy giant Total S.A., according to U.K. publication The Lawyer.
Natural resources and mining are major industries in South Africa and account for about 25 percent of the continent’s capital flow, according to Laryea, who began his legal career as an associate at Sullivan & Cromwell in London and New York. KapdiTwala is a Level 1 Black Economic Empowerment firm in South Africa, a designation that Laryea explains puts it in the top tier of attorney management and training. (South Africa’s BEE program, which provides opportunities for indigenous and other disadvantaged groups, was created to counter apartheid’s negative impact.)
By formalizing its relationship with KapdiTwala, Dentons joins other global firms seeking to expand their reach in Africa, a trend highlighted in The American Lawyer’s Focus Europe supplement earlier this year.
U.K. publication Legal Week reported this week on Baker & McKenzie’s discussions with six leading firms in Nigeria—which recently leapfrogged past South Africa as the continent’s largest economy—about joining the global firm’s Africa platform.
“We have an African relationship firm program designed to build deeper relationships with leading firms in each market, including Nigeria, one of Africa’s most significant jurisdictions,” a Baker & McKenzie spokesman said a statement provided to The Am Law Daily. “Our current focus is on further developing these relationships rather than formal alliances or exclusive arrangements.”
Meanwhile, South Africa’s 530-lawyer ENSafrica—the continent’s largest law firm by attorney head count—announced this week that is is combining with a leading Ugandan firm to open an office in that country’s capital of Kampala. It’s the second major merger deal in four months for ENS, which absorbed the oldest law firm in Mauritius in December.
The Am Law Daily reported earlier this year on DLA Piper’s expansion of its African referral network with the opening of an office in the Algerian capital of Algiers after poaching two partners from local shop Lefevre Pelletier. That move followed Hogan Lovells’ merger late last year with 120-lawyer South African firm Routledge Modise.
Law firms aren’t alone in seeking to capitalize on opportunities in Africa, though they are reaping the benefits of others’ interest in the region.
Atlas Mara Co-Nvest announced last week its proposed $265 million purchase of a majority stake in Botswana-based BancABC, a unit of ABC Holdings, one of the largest financial services providers in southern and eastern Africa. Atlas Mara, a London-based shell company formed late last year by former Barclays CEO Robert Diamond Jr. to make investments in Africa, turned to Greenberg Traurig for outside counsel on the deal.
Greenberg—which two years ago poached former Patton Boggs’ international business chair Jude Kearney to head its Africa practice—advised Atlas Mara on its $325 million initial public offering in December. (Atlas Mara also announced this week that it had reached a deal with the Rwandan government—on the 20th anniversary of that country’s 1994 genocide—to privatize the state-owned Development Bank of Rwanda.)
Alan Annex, chair of Greenberg’s corporate and securities practice in New York, is leading a cross-border team from the firm advising Atlas Mara on the BancABC deal. Rachel Robbins, a former general counsel for the World Bank’s International Finance Corp., serves as a nonexecutive independent member of Atlas Mara’s board of directors.
Robbins is also a director for FINCA Microfinance, a charitable unit of Washington, D.C.–nonprofit FINCA International, whose tax filings show it paid $426,265 to Covington & Burling for legal services in 2011. FINCA, a leading player in the growing microfinance sector, has fared far better than another organization formed to further economic growth in southern Africa in the postapartheid era.
The New York Times reported last year on the demise of the suburban Johannesburg-based Southern Africa Enterprise Development Fund, which collapsed because of a combination of debt and mismanagement. The nonprofit paid $299,645 to Wilson Elser Moskowitz Edelman & Dicker and $269,637 to Weil, Gotshal & Manges for legal services in 2012, according to tax filings.