The age-old dispute whether Law is a noble profession or a business has been long laid to rest. Law firms are set up for the practice of law and to render legal services, just as hospitals are set up to render medical services. However highlighting the importance of the administrative and business aspects of the law profession does not diminish its nobility. There is the professional aspects and the business aspects of the law. Only a well-run business can be an efficient and successful professional firm. Law is both a noble profession and a multi Dollar business.
The Financial reports (2018 gross revenue) of a few law firms sufficiently attest to this fact -Kirkland & Ellis USD 3.76 billion, Latham & Watkins USD 3.39 billion, Baker & McKenzie USD 2.9 billion; DLA Piper USD 2.84 billion, Dentons USD 2.42 billion. Wachtell, Lipton, Rosen & Katzs’ turnover in 2018 -USD 763 million; $6.530,000 in profits per equity partner. Kirkland & Ellis profits per partner $5,037,000; Latham & Watkins $3,452,000, DLA Piper$1,757,000
The sizes and corporate structures of these firms also underscore the importance of the business and administrative aspects of law practice. In the UK despite the uncertainties of Brexit and the much touted impending recession, The Lawyer (a UK based legal research magazine) – reported that well-managed law firms continue to thrive in their practices and benefit from new opportunities in the UK. The research magazine published the 2019 gross revenue of 200 top UK law firms – DLA Piper was at the top of the list with a revenue of £1.946 billion, followed by Clifford Chance £1.693billion, Linklaters £1.628billion, Allen & Overy £1.627 billion, etc.
Coming home to Nigeria, though we are bereft of statistics on law firm, the financial value of a few reported legal transactions sufficiently proves that law is both a profession and a business.
The Business of Law
From the business of law perspective, a law firm is made up of a group of people working together to deliver legal services for profit. A law firm is a vehicle formed to earn profits that will increase the wealth of its owners, all stakeholders and the community in which it operates. A law firm is an organized effort or activities by lawyers working togther to provide legal solution with the intention of building a going concern, an enduring entity.
From the business of law perspective, a law firm is a professional service that must be taken to the market (consumers); therefore it is subject to the market forces of supply and demand. Consequently sound technical knowledge alone – howbeit in Latin and English (Certiorari, Ad litem, Habeas corpus etc.), legalese, wig and gown, the gavel, and other sacred ornaments of the legal profession alone does guarantee the success of a law firm.
A Law firm should be run on sound business skills, knowledge and practices to ensure its financial sustainability. No law firm can survive and thrive without the combination of multi-disciplinary skills and professionals – which the changing aspects of law practice today demands.
Front or Backend?
Every business has a frontend and a backend. Law is no exception. There is the professional aspects and the business aspects of the law practice. The professional aspects – constitutes the frontend and the business aspects constitutes the backend. Is the frontend of a business more important than its backend? Can the backend be overlooked or compromised without consequences? In business, the quality of the backend heavily impacts the frontend.
What constitutes the backend of a law firm? The “messy little details” like Human resources – people or talent management, recruitment, retention, training and development, welfare, compensation, performance management, career progression and development, succession planning. Office Acquisition, facilities management, space planning and ergonomics.
Strategy – visioning, policy formulation, goal setting, mission and objective. Procurement, Logistics, operations, file management. Library and knowledge management.
Business/client development – value proposition, branding, website, social media, market collateral – brochures and newsletters.
Finance – budgeting, profit drivers, pricing, fee setting, billing and collection, cashflow management, tax, insurance, cost control and internal audit.
Governance and structure. Information technology – Practice support systems; Computer hardware and software systems, Electronic privacy issues, Disaster management and Business Continuity Processes, Document and Knowledge Management Systems, Artificial Intelligence, disruptive innovation like the commoditsation of legal services Etc.
The Balancing Act
Many law firms struggle with balancing the professional and business aspects of running their practice.Law practice have some inherent peculiarities that may pose as road-blocks to running a successful business. For instance, law firms are usually populated with very intelligent, opinionated and individualistic professionals. Independence is highly prized by lawyers. This is not a bad thing in itself but it can make governance a nightmare. Also, law firms can have highly politicised internal structures and decisions are usually consensus driven, which again, can make governance a nightmare. After “all said and done,” nothing is usually done because lawyers can have a particular strong aversion to taking directions–and management and administration is usually about directing, planning, innovating. Law firms can be individual client focused, with power usually based on client/revenue generation which is dangerous for firm cohesion. Another threat to law firm cohesion is the argumentative, competitive. Adversarial and even sometimes combative tendencies of lawyers.
Further, law firms usually are short-term focussed, bottom-line focussed and with poor investment mindset. In addition, it has been observed that lawyers are usually risk adverse.Another peculiarity is that most law firms have few role boundaries. It is typical to find lawyers in firms who wants to be the accountant, admin manager and human resources manager at the same time. Even some partnerships do not have and respect clearly defined roles. Unclear roles is the recipe for confusion in business. Importantly, running a successful business requires a lot of creativity and nimbleness. Law firms however are usually bound by precedents, are conservative, intolerant of mistakes – are trained to detect mistakes, impatient and pressurized because of deadlines. All these stifles creativity which is essential for business sustainability.
From the Back Office
From the Back Office will be focused on Law as a business. My name is Joy Harrison-Abiola, I have spent 21 years at the backend of law offices and have made some very interesting observations. Also, through the years, I have had the privilege of interacting with non lawyer (some lawyers) colleagues both in Nigeria and abroad who like me have spent years at the backend of law offices. These very seasoned business support professionals have shared their frustrations, observations and war stories that have helped in my journey. So I will be showing on this page what constitutes the back office of a law firm and how it can be effectively harnessed to make a law firm successful and sustainable.
The Trouble with Vision
A few years ago, I visited the back office of the 11th largest law firm in Boston USA – Burns & Levinson at the invitation of its CEO. I spent a couple of days and had the privilege of sitting down with one of its founders and of course my question was about Vision. What inspired the setting up of the firm in 1960? The “old man” gave me some very interesting perspectives on how they have navigated the very rocky American law business terrain for 50 years holding unto their vision. What is vision? Is there a relationship between vision and law practice? Does a vision drive a law firm or not? Is vision essential to the survival of a law firm? Who gets the vision? Is it essential that the vision is written and documented somewhere for easy reference? Who drives the vision? How is a vision communicated? Is it possible for a law firm to operate without a vision?
What is the vision of your law firm? Where is your law firm going? How far do you want to take your law firm? What will the destination look like? How will you know when you get there? A vision is an inspirational and aspirational destination on the horizon. The trouble with vision is that it is the thing lawyers typically omit to do when opening their law practice. Law firms ignore to articulate a vision for their firm. You find vision in very few law firm websites or marketing collaterals.
Meanwhile, Vision, if well crafted contributes to your brand – it has a way of carving out an identity for a firm – what it does, what it wants to become and what it believes in. Another trouble with vision I have observed from the back office is that even when a law firm articulates a vision, the vision is not translated to a shared corporate vision. Most lawyers lack the skill or the will to do this.
Why is vision, mission, values and a strategy document vital in business? The short answer is that without these, there is no direction, or there are several directions and confusion and wastage of resources follows. A good vision articulate’s the firm’s ultimate goals and objectives in a way that inspires and moves the firm in a specific direction. Any law firm that ignores this will do so at its detriment. A law firm that is serious about growth and success will pay attention to corporate visioning.
Article By: Joy Harrison-Abiola, a leading legal management professional and the Practice Administrator of Adepetun Caxton-Martins Agbor & Segun- ACAS-Law
The Importance Of Good Legal Advice When Doing Business In Nigeria Today – Morenike George-Taylor
Morenike George-Taylor, Group Managing Director of the Flux Group (Image: Morenike George-Taylor)
Every business owner and consultant knows that taking into consideration, COVID -19 lockdowns, END SARS protest, the twitter ban and the rate of the dollar to the Naira, business in Nigeria has been a roller coaster between 2020 and 2021. Business owners had to learn a lot of things and I hope to share them in a series of articles. However, I want to emphasize the importance of good legal advice when doing business in Nigeria. Simply put… it is critical.
Once the COVID-19 lockdown happened, it was a shock to everyone that we could all put our businesses on hold and be forced to work remotely. Zoom became more popular and it became more difficult to physically sign documents. People started using electronic signatures to sign their documents. The question is whether under Nigerian law, an electronic signature is as good as a physical signature. If someone appends an electronic signature to a document, how can you be sure it is their signature? How can you be sure that they wouldn’t deny that signature later on?
More legal issues arose with END SARS, more people had to look into what their insurance contracts cover and do not cover. With the rate of the dollar, loan agreements where businesses collected international funding went awry. A $100,000 loan given in 2019 and repayable in 2021 was now significantly harder to repay and businesses explored whether the drastic rise in the exchange rate was enough to constitute force majeure.
In the midst of all this, those with good lawyers were able to navigate the troubled waters and find solutions even where they were in between a rock and hard place. Those without good lawyers made mistakes that cost them a lot of money. A lot of businesses folded up because they were unable to survive. This is why I have the following tips:
- Always read legal documents before you sign them.
- Pay attention to the exclusion clauses in your insurance contracts.
- Only accept electronic signatures from trusted clients whose signatures you can confirm.
- Pay attention to force majeure clauses in loan agreements you execute and be careful and consider all mitigating and hedging products that can help when receiving loans repayable in foreign currency.
- Put everything in writing, agreements, orders, receipts and so on.
- Get a good lawyer on retainer.
We are all trying to survive and build thriving businesses. I hope these tips save you a penny or two as you run your business.
Article by: Morenike George-Taylor
South Africa: Guidance issued on mandatory vaccination policies for the workplace
South Africa: After months of speculation, the Department of Employment and Labour in South Africa has provided guidance in relation to vaccination policies within the workplace. On 11 June 2021, the Minister published an amendment to the Consolidated Direction on Occupational Health and Safety Measures in Certain Workplaces (Directive), which makes provision for employers to implement a mandatory vaccination policy in its workplace.
Implementing the policy
Before an employer implements such a policy, it must undertake a risk assessment within 21 days of the Directive being published, i.e. by 2 July 2021. This risk assessment must:
• take into consideration the employer’s operational requirements;
• indicate whether it intends to implement a mandatory vaccination policy;
• identify which employees it will require to be vaccinated based on the risk of acquiring COVID-19 at work, or the risk of severe COVID-19 symptoms due to the employee’s age or co-morbidities; and
• be conducted in accordance with section 8 and 9 of the Occupational Health and Safety Act, which places a duty on the employer to maintain a working environment for its employees and other persons that is safe and, as far as reasonably practicable, free from health risks.
Developing a plan
The employer must then develop a plan which sets out the measures it will implement to ensure the workplace is safe for its employees. This plan should indicate whether the employer intends to make the vaccine mandatory for any employees, and must identity the employees who will be required to be vaccinated, the process which will be followed to ensure compliance with the Directive and whether the employer plans to make the vaccine mandatory as and when it becomes available to employees. Any employer who is of the opinion that the vaccination of its employees is necessary for their health and safety may implement a mandatory vaccination policy. The employer’s risk assessment should, however, support this requirement and indicate that there is a legitimate need for the workforce to be vaccinated.
Right to refuse
The Directive sets out guidelines to employers when drafting and implementing a mandatory vaccination policy. In terms of the guidelines, importance is placed on “public health, the constitutional rights of employees and the efficient operation of the employer’s business.” Where an employer makes vaccination mandatory, it must notify each employee identified in the plan that such employee must be vaccinated as and when the vaccination is available to them, and that the employee may consult with a health and safety worker or trade union representative, should the employee wish to do so. Further, the employer must inform the employee of their right to refuse the vaccine on medical or constitutional grounds. These grounds are specified in the guidelines and makes provision for an employee to refuse the vaccine on the medical basis of a “contra‑indication” of the vaccine (i.e. an allergic reaction to the first dose of the vaccine or to a component of the vaccine), or the constitutional basis of the employee’s right to bodily integrity and/or right to freedom of conscience, religion, thought, belief and opinion, as set out in section 12 and 15 of the Constitution.
The Directive prescribes that where an employee does raise one of these objections, the employer is required to counsel the employee, refer such an employee for a medical evaluation for any allergic reaction to the vaccine and, where necessary, reasonably accommodate the employee in accordance with the Code of Good Practice: Employment of People with Disabilities, as published in terms of the Employment Equity Act. Such reasonable accommodation may include allowing the employee to work offsite, at home, in isolation at the workplace, or in limited circumstance, the employer may require the employee to work with a N95 mask.
Where an employer does implement a mandatory vaccination policy and an employee refuses to be vaccinated, the employer must ensure that the grounds for refusal are considered fully and that the employee is consulted in relation to the grounds raised. However, should the employer be unable to reasonably accommodate the employee and the employee continues to refuse to be vaccinated, an incapacity procedure must be followed before the employer may terminate the employee’s contract.
Paid time off
In terms of section 4(1)(k) of the Directive, employers must give employees paid time off at the date and time of their vaccination, regardless of whether such vaccination is in terms of a vaccination policy or not, and sick leave must be used should an employee experience any adverse side effects from the vaccine. An employer may request proof of the vaccination when returning to work, or proof that the vaccination will take place during working hours. Where an employee is vaccinated in terms of the mandatory vaccination plan, the employer must afford the employee paid time off for adverse side effects of the vaccine, even if the employee has exhausted their sick leave entitlement. Alternatively, the employer may lodge a claim with the Compensation Fund, in terms of the Compensation for Occupational Injuries and Diseases Act. In addition, the employer should organize transport to and from the vaccination site, if possible, for employees identified in the mandatory vaccination policy.
In order to comply with the Directive, employers must update their risk assessment of the workplace, taking into consideration any employees who are required to be vaccinated. Employers must take notice of the timeframe afforded by the Directive and ensure that the plan is in place before the 21 day period has lapsed. It is important for employers to conduct the risk assessment objectively and determine the actual need for vaccinations in the workplace and amongst certain categories of employees. Further, any objection raised by an employee should be considered seriously and the employer should try to accommodate such employee where possible. However, the employer may dismiss the employee for incapacity as a last resort.
By Kirsty Gibson, Associate, and Johan Botes, Partner and Head of the Employment & Compensation Practice, Baker McKenzie Johannesburg
Developments in competition law in post-pandemic Africa
Image Credit: Getty Images/iStockphoto
With the growth of economies across Africa, competition law has remained one of the key drivers for effective market participation, consumer protection and fair business practices. However, the global pandemic introduced new challenges for competition authorities in Africa and abroad, with each enforcer pursuing the most beneficial enforcement method for its national or regional jurisdiction.
According to Lerisha Naidu, Partner in Baker McKenzie’s Competition & Antitrust Practice in Johannesburg, “These efforts were aimed at curbing the persistence of unjustified price hikes, anti-competitive cooperation between competitors and other harmful business practices that sought to undermine competition. In addition to the urgent responses to the unprecedented impacts of the global COVID-19 crisis, competition authorities in countries and regions across Africa continued to introduce new laws and amend existing legislation as a sign of the rapidly increasing prioritisation of competition law enforcement on the continent.”
Competition authorities across the continent had already established strategies for maintaining competition and limiting instances of customer exploitation in their respective countries by early March 2020.
“Competition authorities in Kenya, Malawi, Mauritius, Namibia, Nigeria and South Africa reacted quickly to pandemic impacts by introducing new guidelines and regulations,” noted Angelo Tzarevski, a senior associate in Baker McKenzie’s Competition Practice in Johannesburg.
Amendments to existing laws
Various jurisdictions have recently strengthened their competition law regimes by way of amendments to the existing legislation or by introducing entirely new laws to facilitate their enforcement efforts.
“For example, Botswana’s Competition Act came into force at the end of 2018. Kenya recently introduced a host of new laws, guidelines and rules that relate to buyer power, the valuation of assets in merger transactions, block exemption of certain mergers from notification, merger thresholds and filing fees, market definition, and new guidelines for the determination of administrative penalties. Ghana’s Draft Competition Bill is currently before parliament awaiting passage into law, and Egypt and Mauritius amended their competition legislation by introducing or giving effect to new provisions and regulations. In South Africa, price discrimination and buyer power provisions that were previously introduced by the Competition Amendment Act have since come into effect. Regulations were also issued to facilitate the interpretation and application of these provisions,” said Tzarevski.
In addition to country-specific regulation, a number of regional competition regulators in Africa are impacting domestic markets. Such regulators include the West African Economic Monetary Union (WAEMU), the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS) and the Economic and Monetary Community of Central Africa (CEMAC). While not a regional regulator, the African Competition Forum, an association of African competition agencies, promotes competition policy awareness in Africa and the adoption of competition policies and laws. The Forum also facilitates regular contact between authorities, creating a platform for the sharing of best practice and domestic competition trends.
“African competition law continues to develop at a rapid pace, boosted by the implementation of protective strategies necessary during the peak of the pandemic. An increasing number of jurisdictions have adopted laws and regulations, established authorities, secured membership to regional antitrust regimes and ramped-up enforcement of suspected violations of prevailing competition laws at both domestic and regional levels.
As such, organisations transacting across borders in Africa must ensure they are compliant with a myriad of local and intersecting regional competition laws to avoid facing the wrath of the continent’s competition authorities. Access to standardised, cross-border information on the latest competition law developments in Africa has become essential for those transacting in the region,” added Naidu.
Baker McKenzie recently produced a comprehensive guide covering the latest developments in African competition law in 25 countries across the continent – An Overview of Competition & Antitrust Regulations and Developments in Africa: 2021
By Angela Matthewson for Baker McKenzie Johannesburg
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