The queue of international firms looking to enter the South African market became one shorter in November, as transatlantic giant Hogan Lovells announced it had tied up with Routledge Modise after ten months of talks.
The 40-partner South African firm, an ally of Eversheds until October last year, will operate under the Hogan Lovells banner, but will not share the same profit pool, as local regulations prohibit it.
Current Routledge chairman Lavery Modise will retain his title in South Africa, while the directors of the firm will now be referred to as partners. The new team is not expected to take up any positions on Hogan Lovells’ board.
Routledge Modise’s 120-lawyer Johannesburg office focuses on corporate, commercial, litigation, employment and mining work – the latter being an area of particular attraction to Hogan Lovells and one of Routledge’s recognised strengths.
‘We are disciplined in terms of where we go – we don’t do flag planting.’
David Harris, Hogan Lovells
On why the top-ten LB100 firm chose to invest in the region, Hogan Lovells co-chief executive David Harris said: ‘We are disciplined in terms of where we go – we don’t do flag planting. There is an increased importance on having an “on the ground” presence, particularly in the sub-Saharan region, as so many of our clients have operations there.’
Harris is adamant that the lack of full financial integration ‘isn’t a barrier to the successful cultural operation of the firm’, so long as the ‘business integration is structured correctly and doesn’t affect service to clients’.
Another Hogan Lovells partner added: ‘Trying to find the right entry point is difficult for anybody thinking about Africa, but it presents some good opportunities for us, not least because clients have been asking about it.
‘It was put to the partnership pretty late, but I don’t think anyone feels uncomfortable about it.’
This is not Routledge Modise’s first association with an international firm, after its alliance with Eversheds came to an end in October last year due to client conflicts.
The tie-up comes amid expectations of more combinations between international players and South African practices, as the region acts as a gateway to the rest of the increasingly touted African market.
Other firms to significantly expand their offering in the continent in recent years include DLA Piper and Baker & McKenzie, while Norton Rose and Linklaters tied up with top-tier local advisers. Meanwhile, there is significant chatter in Johannesburg that Clifford Chance is looking for its own deal, with a focus on Bowman Gilfillan.
sarah.downey@legalease.co.uk