African in-house market set for rapid expansion, predict GCs

In-house counsel in African companies are quickly gaining prominence and control over their businesses’ legal function, The Lawyer research has shown.

General counsel at major African organisations believe that like their counterparts in the UK and US, they are increasingly able to control their legal spend and bring work in-house.

”Across the board, in-house teams are trying to do a lot more work themselves,” said Ngozi Okonkwo, chief legal officer for Nigerian energy giant Oando.

“It’s evolving towards a mix of internal and external. There’s no magic formula. There are areas such as statutory work and general transactional areas where it makes economic sense to bring work in-house,” said Michael Spivey, group general counsel of South African retail company Massmart.

Research for The Lawyer Africa Elite 2014 indicated that legal teams in Africa’s largest companies remain fairly small and the use of external advisers is more often on a ‘preferred relationship’ than a formal panel basis.

Companies are also using their external relationships to help further the development of their jurisdictions. For example South Africa’s state-owned electricity utility Eskom, which is currently reviewing its 72-strong panel, has asked firms to demonstrate their willingness to invest in the local legal market, as well as issues like the pricing, footprint and expertise of firms.

Despite the growth of pan-African networks and alliances, these are not necessarily the preferred way for African in-housers to instruct lawyers across the continent, with some general counsel commenting that the networks are not as effective as they could be.

Legal chiefs are predicting that more lawyers will move in-house in Africa in the future. The scope for growth is significant, with legal teams generally small even in the largest companies and most of the market concentrated in South Africa.

For more on the African in-house market, read the Africa Elite overview and our in-house interview with Adefunke Adeyeye of Nigeria’s Silverbird Group.