The imperative of securing financing on satisfactory or bearable terms – at whatever stage of development, and in whatever market a company might find itself – is a universal quest in the present global economy.
However, this quest must be balanced against certain considerations, among the Rules of Professional Conduct (RPCs) that have governed the legal profession in Nigeria for decades now.
How and where such financing is to be found, and the conditionalities (if any) involved, was the subject of an intensive panel discussion on Day 3 of the annual conference of the Nigerian Bar Association’s Section on Business law (NBA-SLP) in Uyo, Akwa Ibom State.
Moderated by Chief Assam Assam, SAN, the Principal Partner at Lex-Fori Partners, the panel consisted of a mix of legal as well as financial minds. Apart for Chief Assam, the other lawyers were Tunde Balalola, SAN, Ummahani Amin; Tola Oshobi, SAN; and Jibrin Okutepa, SAN (who participated virtually), while Olumide Balogun was the lone banker on the panel.
Advancing reasons why a law firm might seek additional financing, Oshobi, who is a Partner with the firm of Balakin and Co., listed at length the various funding options available in both the local and international markets. Some of these options are limited to certain areas of law while others have a more general application.
He listed a few options such as third-party funding, judgment andvarbitral awards, international mergers and partnerships, collaborations between international consulting firms and law firms, and Swiss Verein, etc. Many of these funding options, he added, are subject to rules set by the World Trade Organization’s General Agreement on Trade in Services (GATS) and the African Continental Free Trade Agreement (AfCTA).
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In his contribution, Babalola took up where Oshobi left off, listing some more funding options, ways of accessing them, and the respective conditionalities attached to them. He also offered more ingenious ways a law firm could raise money as well as keep its books. He also listed a number of rules governing the management of its current and prospective financial assets.
Speaking from his chambers in Abuja, Okutepa focused more on the inherent deficiencies embedded in the Rules of Professional Conduct such as Rules 5 and 20 which prohibit a lawyer from forming a professional partnership with a non-lawyer; which prohibit a law firm from being run as a company (complete with billboard and press advertisements); which prohibit a multidisciplinary law firms; which prohibit a legal practitioner from engaging in any other enterprise etc. He therefore called for the amendment of the RPCs to allow lawyers to engage business (as a way of augmenting their professional fees) so long as these others do not bring the legal profession into disrepute.
Balogun, who is the regional manager in charge of small and medium enterprises (or SMEs) at Ecobank Transnational Inc.), began by disclosing the particular interest his organization has shown on law firms – as they fit into his department’s SMEs profile. SMEs, he said, make up over 80% of the nation’s labour force, and yet only 5% of them have access to credit, and of all the challenges they face, obtaining financing is the most significant (at 22%, compared to finding customers, for example, at 16%).
While acknowledging the barriers standing in the way of financing for SMEs, such as collateral, Olumide said (to sustained applause from the assembled guests) that his company has embarked on a review to deemphasize the requirement for collateral as a loan condition – in favour of intangibles such as capacity and character. But he hastened to add, though, that lending will also be based on evidence of sustainable revenue. There shall be no lending on speculative propositions, either.
On building capacity, especially among young lawyers, Olumide ended by suggesting that they embrace digitalization and scale up their practice to global standards. He expressed Ecobank’s eagerness to work with the NBA in the area of capacity building as a condition for obtaining credit.
Ummahani Amin, the managing partner of the Maiduguri-based Met Law Firm, treated the assembled conferees an intriguing person story of her journey from a struggling young lawyer to the head of a thriving law firm with three offices across the nation and over a dozen lawyers in its employ. The key to success in running a successful law firm, she says from hard-earned experience, is to determine what sort of law firm one wishes to operate; look for employees who share one values and vision; and never underestimate the value of partnerships and collaborations.