Investors in Africa face an increasingly complex business environment, with numerous geopolitical and economic risks to consider, as well as having to comply with varying legal requirements across the continent. There is no denying that doing business in Africa in the current economic and political climate is difficult, and this is especially true in the legal market. Navigating the disharmony of African regulatory regimes can make or break deals and projects, and is a source of relentless frustration for investors in the continent. Nonetheless, the opportunities remain and many African regions are ripe for new and innovative ways to address these challenges.
However, such innovation in legal services needs to be real and tangible and requires the creation of conducive environments and strategies. One way to instil the attitude necessary for such innovative solutions to emerge is to follow a service design approach, and start with the core needs and experience of the user of such services: the client. This means placing the client's user experience (UX) at the centre, empathising with their wants, needs and pain points, and iterating solutions based on identified problem statements in a process referred to as 'design thinking'. Founded in the methodology developed by Stanford University, the aim behind this approach to service design is to co-create solutions and services with clients from the ground up, so that new and different perspectives and approaches can be identified.
This design thinking methodology was recently applied in a series of workshops at Baker McKenzie's African Transactional Summit, which was held in May 2019 and attended by members of its African Relationship Firms (ARFs) from more than 20 countries in Africa, as well as the firm’s Africa specialist lawyers and its key clients. Via a process of brainstorming and collaborating, the pain-points with regards to legal services in Africa were identified and broken down into clear problem statements, and solutions to these problems were identified, explored and developed.
Stemming from this process, the following were identified as some of the challenges, or 'pain points', related to legal services in Africa:
- It was found that key to addressing the challenges of investing in Africa is the ability to navigate uncertainty across the African market. Investors in Africa increasingly require real knowledge and cannot rely on market perception, particularly for markets where there is lack of reliable, industry-specific information and accessible data.
- African dealmakers need better ways to understand the fast developing global trade trends through the lens of their African operations, and how and where these could impact their businesses.
- The speed of project implementation is critical to any deal. As such, dealing with onerous government approvals and complex legislative frameworks adds considerable time to deals, and even stalls them.
- Communication in multi-jurisdictional matters and deals, can also sometimes be overwhelming for investors in Africa, particularly where differing terms are used in different jurisdictions, making it difficult for investors to understand the large volumes of communication coming in from varying advisors, at the same time. Not only do investors want more information, but they also need better ways of streamlining this correspondence across various stakeholders on multijurisdictional transactions. They are looking for ways to standardise these communications so they can quickly digest, and process key information and readily understand the impact on their businesses.
- There is also a need for a better understanding of the culture of doing business in jurisdictions in Africa, particularly where local nuances are relevant and in areas where local regulation is still being developed. Where investors enter new or unregulated business models in local markets (particularly in the TMT space), they need solutions on how they can interact with the public sector in order to understand the approach taken by local government, as well as act as a stakeholder in the development of new regulations. New and innovative ways to manage stakeholder and local advisor engagement requires greater focus.