The Commonwealth – an engine for Legal Innovation?

In the past decade, the Commonwealth has evolved from a way for the U.K. to create its own economic and soft-power spheres of influence with former colonies into a larger organization focused on trade among its members.

Where on your passport would stamps from the 2022 Commonwealth Heads of Government (CHOGM) meeting originate?

If you practice law in the United States, when you hear the word Commonwealth you probably think of Massachusetts and Pennsylvania — or perhaps Virginia and Kentucky. If you practice in the United Kingdom, most likely the Commonwealth implies an organization designed to keep past British colonies close and play sports against each other ever four years, so you’d be forgiven for guessing London.

Neither of those inferences suggest that the heads of 54 governments would have a CHOGM in Rwanda, a country that was never a British colony. But indeed, last week I flew to its capital, Kigali, as a delegate for the session — an opportunity I’m not sure many lawyers or legal entrepreneurs would drop everything to take. But as the founder of a U.K.- and Rwanda-based legaltech company, Hence Technologies, I knew the conference would attract top regional businesses and provide the basis for an exploration of their experience with legal services in the context of a large ministerial gathering. Besides, I’d have a better chance of snapping selfies with Prince Charles and the U.K. Prime Minister there than in London. So, there I went.

What I quickly learned is that this isn’t your grandfather’s Commonwealth. In the past decade, the Commonwealth has evolved from a way for the U.K. to create its own economic and soft-power spheres of influence with former colonies into a larger organization focused on trade among its members. It now serves as a vehicle for smaller countries to prominently voice their opinions on issues like the devastation climate change brings to island nations. And its membership rules have evolved such that countries which were not former colonies — like Rwanda — can join on the basis of ascribing to the prominence of English-speaking language and other core values. Gabon and Togo, similarly, were admitted this year.

So where does law fit into the equation? “The Rule of Law is an essential part of the Commonwealth charter and the legal sector plays a key role in developing and sustaining Commonwealth trade” says Sir Hugo Swire, deputy chairman of the Commonwealth Enterprise and Investment Council (CWEIC). “Shared legal practices is one of the benefits of Commonwealth membership and one of the key parts that make up the Commonwealth advantage — that make it now 21% cheaper to trade between Commonwealth countries.”

The case is similar in general with independence of the judiciary. The “common law basis of much of Commonwealth law makes a fruitful basis for cooperation. Judicial networks are often strong with Commonwealth chief justices meeting regularly. These justices encourage each other to stick to their constitutions and not succumb to political pressure” says Nicholas Westcott, who is director at the Royal African Society and previously served as the EU’s top diplomat for Africa.

So, all of this means it must be easy to get consistent legal services that enable international business from Antigua to Zambia, right? Not quite.

From conversations with dozens of senior officials, business leaders, and entrepreneurs I’ve drawn a few conclusions about legal services across the Commonwealth.

First, the practice of law remains a fundamentally political and personal business, particularly in the smaller member-states that are most keen on using the Commonwealth as a trade network. I could argue this is no different than in major Western economies, but, in fact, when communities are smaller, it’s not uncommon for every party involved in a dispute to already have deep relationships. This means strengths and weaknesses of the lawyers on both sides are known from ongoing personal relationships and can be exploited as the legal process unfolds. In some cases, that comes from the exertion of unrelated political pressure to get matters to go away before they emerge. Knowing whether your counsel is a power player or not is critical before engagement as you can be sure the opposing party is well aware and ready to use that knowledge to their advantage.

Second, big global law firms continue to dominate the scene for those making inbound investments. But there are challenges in getting the right advice through this entry point. Boko Inyundo, who held senior roles at global law firms DLA Piper and Linklaters before joining Hence Technologies, the startup I co-founded, provides helpful perspective.

“When Fortune 500 companies source legal advice via the global elite of mega firms they run the risk of accessing deep specialist legal insight that can be decoupled from regulatory changes occurring in real time locally on the ground. This can be the case when working with the “Africa Desk” of a mega firm where the firm is triaging support to the client on Africa deals via their London, Paris, or Dubai office. Here the corporate legal department is heavily dependent on how well integrated the global teams in the mega firms are with their local counterparts in the relevant African countries. And that is heavily dependent on how rich the referral work is, and has been over the years, between the ‘main’ (often U.S. or U.K.) offices of the mega firm and the office(s) or local affiliate firms on the African continent. And when the Fortune 500 legal department opts to source legal advice direct from a local law firm in Africa, the corporate runs the danger of accessing deep knowledge of the local regulatory dynamics decoupled from the high, and often shifting or nuanced, expectations of the increasingly large global pools of capital that have been flowing towards Africa.”

Third, where pricing is consistent, it is consistently high in the case of big law firms serving small markets. That is to say, I’ve personally experienced flat-rate pricing that literally commands the equivalent of one year’s per capita GDP in a small market to file a single-page form. And the equivalent form is often quoted cheaper in absolute terms to have a paralegal file in London.

Where someone tries to go directly to local counsel, the pricing can get funkier. One entrepreneur told me the story of successfully working with local counsel in East Africa, after which he received what amounted to a loan request. In effect, the note said “because you value my practice and will use us again, can you please now transfer me the same amount again in advance to ensure we stay in business.” This is not all that different from my own experience where I was required to transfer double what I intended to spend into a rand holding account to attain South African legal advice. My balance remains sitting in a rapidly depreciating currency even though the counsel’s hourly rates were denominated in euros.

But as the Commonwealth has evolved into a business-oriented constellation, there are efforts under way to “let the business begin,” as was the common refrain at the conference. In particular, one of the more innovative programs I came across was the CWEIC’s Commonwealth Legal Network (CLN). The CLN effectively vets law firms so that businesses aren’t starting from scratch as they seize opportunities that result from closer collaboration. While there are only 11 firms in the newly launched program, Riyan Sherif, business development manager for CWEIC, tells me “The Commonwealth Legal Network is already becoming a great tool for both businesses and law firms to find partners across a trusted network. We are already seeing referrals between members and new connections being made.” When built out to scale, the types of networks can provide efficient shortcuts as well as a common place to capture and share feedback.

I’ve returned to London with more respect for the Commonwealth and also a deeper appreciation for the important role it plays for smaller countries attempting to raise profile to attract investment and make their case on global issues in an amplified way. But I only landed one of the intended selfies.

“By SEAN WEST, originally carried on Above The Law

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