IFLR 1000
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Nigeria's legal market is by far the most developed in the region and consists of some top flight lawyers by international standards. "It is the most vibrant legal sector in Africa," says one international counsel....

Nigeria's legal market is by far the most developed in the region and consists of some top flight lawyers by international standards. "It is the most vibrant legal sector in Africa," says one international counsel.

While the majority of firms are small in number and dominated by strong individuals, a significant segment of the market has grown to house teams of around 50 lawyers with decentralised departments run by up and coming, or established, partners. Local partners expect firms to keep growing in size.

Most leading firms have modern corporate firm-like structures and a number of UK and US trained lawyers among them, and growth in the market is increasingly allowing them to attract experienced lawyers back to Nigeria. "The top seven or so firms are recognised as being strong across a number of areas," says an international counsel. Many of the global firms have secondment programmes with the top players.

The most commonly mentioned leading individuals in the market are Konyinsola Ajayi of Olaniwun Ajayi, Gbolahan Elias of G Elias & Co, Dan Agbor of Udo Udoma & Belo-Osagie, Asue Ighodalo of Banwo & Ighodalo and the three leading partners of Aluko & Oyebode, with Theophilus Emuwa and Lawrence Fubara Anga of Aelex and Olumide Akpata of Templars among them.

International law firms are present in the market and actively courting the local firms and clients. However, strict rules prevent foreign firms from establishment in the country.

CONTEXT AND TRENDS In 2011 the Nigerian market saw a number of important changes and partners note various trends. 2011/2012 saw the completion of a consolidation in the banking sector as the Asset Management Company of Nigeria (AMCON) and Central Bank of Nigeria (CBN) intervened to overturn the universal banking model....

In 2011 the Nigerian market saw a number of important changes and partners note various trends.

2011/2012 saw the completion of a consolidation in the banking sector as the Asset Management Company of Nigeria (AMCON) and Central Bank of Nigeria (CBN) intervened to overturn the universal banking model. The result was a flurry of financial sector M&A activity, for example Access Bank's acquisition of Intercontinental Bank, restructurings, with banks such as United Bank of Africa (UBA) reorganising into a holding company structure, and what one partner calls "a lot of capital restructuring".

AMCON has embarked on a $4 billion debt issuance programme to work away the bad debts of the banks and, according to one partner, this has spawned about 25,000 litigation cases. Partners say the consolidation has strengthened the sector.

"Banks now need to work their balance sheets," says one partner, "equity markets are slow so there is a need to lend and they are very eager; some banks are out to lend the whole lot alone but borrowers push them to syndication". Merchant Bank of South Africa also completed a debut financing in the country after "rumours for a while that it would make its move into the market".

According to one partner, M&A has been "fairly quiet" outside the banking sector. "The PIB [Petroleum Industry Bill] still hasn't been signed and it is causing a significant slowdown and as long as the bill isn't passed there won't be any serious investments," says one partner. The hope is that the PIB, which intends to unify numerous sector regulations and laws and split the commercial and regulatory function of the Nigerian National Petroleum Corporation (NNPC), will be passed by 2013. Firms did however see M&A from "international oil companies (IOCs) divesting and abandoning unprofitable fields," says a lawyer.

There was also movement in the retail sectors with companies such as Heineken, SAB Miller, Diageo and Shoprite making investments, and firms point out that the private equity sector has been particularly active with players such as Helios Investment Partners and international financial institutions (IFIs). Finally, the privatisation of 17 entities in the power sector also created a "scramble", says one partner, with over 300 bids being registered.

The equity capital markets have been slow and in notable deals firms worked on de-listings for the Nigerian Bottling Company (owners of the Coca-Cola franchise) and Nampac. However things picked up on the debt side with the first ever Naria-denominated supra-national bond, an increase in corporate bonds and issuances from state governments. "A lot of state governments are waxing lyrical about developing infrastructure," says a partner.

Key recent legislative developments have included the amendments in December 2011 to the Pensions Act, which potentially releases up to N2 trillion ($12 billion) held in pension funds by allowing fund managers to invest in financial instruments and infrastructure projects. The change has so far helped finance a number of funds including the Nigerian Infrastructure Fund.

Key concerns for foreign investors on the legislative front are the Local Contents Act, passed in 2010, and the UK Bribery Act. Investors are also concerned by general factors most often cited as political instability and security. While security used to be an issue mostly confined to the Niger Delta, today it is the northern territories and the capital Abuja, that are associated with equally high security risks.

MAJOR LATERAL HIRES

Dayo Okusami
From: Templars
To: Atlantic Energy

Olayemi Anyanechi
From: Sefton Fross
To: Templars

MAJOR LEGISLATION CHANGES

Petroleum Industry Bill (PIB)
Pending

Pensions Act – amendments
Passed in December 2011

Local Content Act
Passed in April 2010 and established in 2010 the Nigerian Content and Development Monitoring Board (NCDMB)

RISING STARS

Aelex
Olusina Sipasi

G Elias & Co
Segun Omoregie

Olaniwun Ajayi
Wolemi Esan
Yewande Senbore

Abdulai Taiwo & Co
Alayo Ogunbiyi
Lape Silva

Jackson Etti & Edu
Nkem Ekwere
Abayomi Adebanjo

Advocaat Law Firm
Atinuke Dosunmu

Paul Usoro & Co
Mfon Ekong Usoro

Tokunbo Orimobi & Co
Michael Orimobi