Turning up the heat – South Africa's role as a hub for the wider continent
According to many lawyers in South Africa the vibe at the African Mining Indaba – a practically mandatory event in every major local law firm's calendar – was somewhat reserved this year. It is not hard to see why, when taking into account reduced output volumes from the economy's cornerstone mining sector. Onlookers observe that South Africa is facing an onslaught of negative sentiment given the volume of industrial disputes and unrest in the mining sector as well as the imminent presidential election, causing many investors to hold off until a clearer picture emerges. Added to this, the rand has tumbled against the world's major currencies, resulting in a hike in benchmark interest rates. Some lawyers in the jurisdiction have been surprised, then, at the influx of international newcomers in the past year. Linklaters became the first of the magic circle to establish a significant presence on the ground when it sealed an alliance with Webber Wentzel at the end of 2012, while Hogan Lovells forged a tie-up with former Eversheds alliance firm Routledge Modise in December last year, with the latter now trading under the Hogan Lovells brand. Eversheds itself re-entered the South African market at the same time, after signing an agreement with Mahons Attorneys a year after its split with Routledge.
With international law firms still flocking to South Africa, the region’s legal market is becoming increasingly crowded. As many local outfits look to take on the influx of newcomers with plans to expand their offering across Africa, others are forming alliances with their global counterparts. Pui-Guan Man uncovers the challenges facing both sets of firms
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