Kenya’s elite law firms earn millions in busy mega deals market

Legal fees typically range from 0.1 per cent to 0.5 per cent of the deal value, according to Business Daily research based on companies’ regulatory filings. PHOTO | FILE

Kenya’s elite law firms cashed in on 2015’s busy deals market to pocket hundreds of millions of shillings in corporate legal advisory fees and maintain their stranglehold on the lucrative segment of legal practice, according to a newly released global ranking of lawyers.

London-based consultancy Chambers & Partners says Nairobi’s position as Eastern Africa’s commercial hub provided top law firms with a pipeline of mega deals estimated to be worth more than Sh200 billion in the year — a new high in the market segment.

The deals came in the form of mergers and acquisitions, debt and capital raising, real estate, intellectual property rights, corporate restructuring and commercial dispute resolution.

Chambers & Partners expects increased deal making in Kenya this year, powered by last year’s review of company and tax laws, digital innovations, investment in infrastructure, and the rise in oil sector activity.

“Improvements to the business environment, significant investments in large-scale infrastructure projects, increased access to mobile money, the continued expansion of the middle class and a booming real estate sector are expected to spur economic growth,” Chambers & Partners said in a statement.

Mahesh Acharya, a partner at Kaplan & Stratton, said apart from property deals which are regulated by law, there is no fixed rate of charging fees, making it difficult to estimate the amount of fees earned from the transactions.

“We always charge on the basis of time expended on a particular deal,” said Mr Acharya, adding that property deals are charged based on rates spelled out by the Advocates Remuneration Order.

Legal fees typically range from 0.1 per cent to 0.5 per cent of the deal value, according to Business Daily research based on companies’ regulatory filings.

The 2015 Chambers & Partners ranking shows that the cream of Kenya’s corporate law firms is made up of Anjarwalla & Khanna, Coulson Harney and Kaplan & Stratton — who retained their positions in Chambers & Partners’ Band 1.

There are now two commercial law firms in Tier Two: Iseme, Kamau & Maema Advocates (IKM) and Walker Kontos.

Hamilton Harrison & Mathews dropped to Band 3 to join the law firm of Mboya Wangong’u & Waiyaki Advocates, Daly & Inamdar and Muthaura Mugambi Ayugi & Njonjo Advocates (MMNA).

Band 4, which in 2014 had Mboya Wangong’u & Waiyaki Advocates and MMNA, has since been abolished.

Mombasa-based AB Patel & Patel Advocates as well as Nairobi firm Amin & Co Advocates were marked as up-and-coming law firms to watch. The annual global ranking of law firms and lawyers is based on the value and complexity of the deals handled.

Chambers & Partners is a critical ranking in the corporate advisory services world because of its use as a reference tool by multinational companies looking for advice in markets where advertising of legal services is controlled.

“The ready availability of specialist advisers to guide the deal process is a major factor working in the country’s favour,” said Richard Harney, managing partner and co-founder of Coulson Harney.

One of the biggest corporate deals of 2015 was private equity firm Helios disposal of its 24.99 per cent stake in Equity Group to a consortium of new investors.

Karim Anjarwalla and Anne Kiunuhe of Anjarwalla & Khanna acted as Helios’ legal minds behind the $500 million (Sh50 billion) deal that saw the Africa-focused PE firm sell to UK fund Genesis Investment LLP (5.4 per cent), NSSF Uganda (2.44 per cent) and Norfund & NorFinance (12.2 per cent) among others.

Mr Acharya advised Norfund on acquiring half of Helios’ interest in Equity, equivalent to 12.223 per cent.

The pair of Anjarwalla and Kiunuhe is also advising Helios on its ongoing acquisition of a 70 per cent stake in loss-making Telkom Kenya, currently held by French multinational France Telecom.

The old law firm founded in 1958 in Mombasa inked other big-ticket deals last year, including Centum’s sale of a 50 per cent stake valued at $56 million (Sh5.6 billion) in the upcoming Two Rivers real estate development.

Karim Anjarwalla and Rosa Nduati-Mutero were the lead legal counsel for Equity Bank when the lender acquired 79 per cent shareholding in ProCredit Bank for $34.5 million (3.45 billion) to mark its entry into the Democratic Republic of Congo.

Maureen Mujera, a partner at Ogola & Mujera Advocates, advised Actis in the development of the Sh25 billion ($250 million) Garden City, which officially opened in May last year with 33,000 square metres of retail space, 76 two- and three-bedroom apartments and duplexes and a three-acre central park.

Dominic Rebelo, a partner at Anjarwalla & Khanna, acted for South African firm Consol Proprietary to wholly acquire Central Glass Industries from EABL in a deal valued at $60 million (Sh6 billion).

EABL relied on the legal expertise of Richard Harney to float the first tranche of its Sh11 billion corporate bond last year and which is currently trading on the Nairobi bourse.

Christine Mweti, a partner at Coulson Harney, guided mid-tier lender Commercial Bank of Africa, controlled by the Kenyatta family, in January 2015 as it listed a Sh7 billion note at the Nairobi bourse. The professional fees charged for legal services was Sh4 million.

Paras Shah of Coulson Harney advised micro-lender Real People to float a Sh5 billion note on the Nairobi bourse, charging Sh5 million in legal fees. The financier started trading a Sh1.63 billion bond on the NSE in August 2015.

Mboya Wangong’u and Waiyaki Advocates scored a first when it directed the listing of Kenya’s first income-real estate investment trust floated by Stanlib.

The indigenous law firm made Sh31.25 million in professional fees for conveyancing and legal advisory.

Mboya Wangong’u & Waiyaki Advocates further pocketed Sh7.5 million in legal fees for advising Chase Bank on its Sh10 billion capital raising plan via a bond offer.

The first Sh3 billion tranche was oversubscribed by nearly two-thirds in June last year, prompting the now collapsed mid-sized lender to exercise the green shoe option to take up the extra Sh1.8 billion.

The law firm also handled Family Bank’s bond offer in September last year, which raised Sh2 billion out of the Sh4 billion target. Godwin Wangong’u invoiced Family Bank Sh25 million in legal fees, according to regulatory filings.

Centum in May last year raised Sh8.31 billion against a targeted Sh6 billion by way of a bond issue, where Coulson Harney earned Sh5 million in legal fees.

Hamilton, Harrison & Mathews earned Sh2 million or 0.1 per cent of Sh2 billion raised through Imperial Bank bond.

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