Kenya: Right from the onset, Edward Mungai is quick to point out the difference between legal dramas on television and the actual business of law.
“People are used to watching legal dramas on TV and think there is drama in the legal industry, but look around you, where do you see drama?”
Mr Mungai occupies the corner office at MMC Africa Advocates, the firm he started from scratch two decades ago, when he was 23 and straight out of law school. The firm has grown to become one of the largest deal-making outfits in Kenya.
Brand visibility
In the 20 years that Mungai and MMC Africa have been in business, the country’s legal industry has gone through so many changes (including some that have allowed us to conduct this interview), and the general feeling is that the best is still to come.
“Lawyers have not exactly been allowed to advertise,” he said, regarding the Advocates Marketing and Advertising rules of 2014.
“But the legislation around marketing and brand visibility has been opened up a bit, but is limited to full-on commercial advertising.”
This means law firms can now sponsor corporate events like golf tournaments and can display their names and logos among other elements of marketing that were hitherto prohibited.
But it is not just in advertising and marketing that the legal profession in the country has transformed. Three regime changes, two referendums, a new Constitution and a radical judicial overhaul have seen lawyers in Kenya today play in a whole different ball game than their peers did two decades ago.
Notorious reputation
MMC Africa, which started out as a one-man show, was set up at a time when lawyers had a notorious reputation.
The legal fraternity was seen to be in bed with a government accused of human rights abuses and stifling dissident voices.
The judicial system had also ground to a halt, a systemic problem that cascaded to the legal profession, leading to strained relations between lawyers and their clients.
Mungai started out providing litigation services for accident victims seeking compensation.
“Accidents were happening all over the place and people were not getting compensated and I decided to go into this business but do it differently,” he said.
His strategy was to settle claims fast and ensure victims got their money as soon as the settlement was paid. He also combined individual suits from the same incident and worked on them as one case.
Within six months, he had employed his first lawyer, and six months later, he acquired a partner, marking the expansion of MMC Africa, then housed on Nairobi’s Wabera Street.
Soon, the very insurance companies that were fighting him started giving him contracts, which saw the young lawyer transition into corporate litigation.
“I started a debt recovery department that is still in our firm to date, and commercial banks came to us to help them crack down on defaulters, a phenomenon that was commonplace then.”
But it was not until he landed the deal to revive Uchumi Supermarkets in 2003 that it became evident to the industry that Mungai and MMC Africa had come of age.
“The suppliers came to us asking us for our recovery services to help them get their money back,” he said.
“However, Uchumi was on the brink of bankruptcy and we sat down with the creditors and explained that even if the business was liquidated, they would not get their money back.”
After long negotiations between the Government, suppliers and commercial banks, it was decided that the creditors of the besieged retailer would turn their debt into equity. A receiver manager was then appointed to steer the company back to profitability.
The successful brokering of the deal saw MMC Africa earn a spot in the country’s growing corporate scene. The firm went on to handle more high-profile deals, including the revival of the Kenya Co-operative Creameries (KCC).
It was also part of a consortium of five local law firms that provided legal advice in Safaricom’s initial public offering (IPO) in 2006.
Mergers and acquisitions
Twenty years ago, you could count on one hand the number of indigenous law firms that could handle IPOs, and mergers and acquisitions.
Today, small indigenous law firms have merged to create bigger firms, while large firms have increased their catalogue of services. The result has been the creation of a strong, local industry, minimising the reliance on firms from the UK and South Africa.
This has had a domino effect on the demand for skills, evidenced by the interest in legal training in the country.
When Mungai and his peers in the industry were graduating, their classes had an average of 80 students a year. Today, an average of 4,000 law students graduate annually.
“Almost every university today is churning out law graduates, and this is impressive growth. Of course, perceptions on quality vary and is debatable, but in my opinion, this is a good start,” he said.
And the maturity of the industry has seen Kenyan firms get involved in more deal making, which Muriu says offers valuable lessons not taught in school.
Strategic advantage
One of the key lessons is the strategic advantage that comes with creating partnerships.
“The trend we are seeing right now in the legal profession is more firms are consolidating and creating partnerships. Having a large team gives you a bigger pool of skills, and large multinational and local clients tend to rank you above individual-run law firms, so you get more business. This is the future of the profession,” Mungai said.
“This does not mean that one-man shows will cease to exist, as they still have their role to play. We may, however, see them confined to serving specific niches and providing basic litigation services.”
Today, MMC Africa, which has 10 partners and dozens of lawyers, is on a mission to grow its offerings to include emerging opportunities that come with the region’s growth.
“In the last 50 years, there has not been any practice in this country around oil and gas, but Kenya is now moving towards becoming a producer of hydrocarbons and we need to build legal capacity in this area,” said Mungai.
Parting shot? “We have made a lot of gains in the profession, but the next step should be to create laws that outlive us. Currently, there is a tunnel-vision approach towards formulating legislation in the country that should be addressed.”
