An interview with Mona Zulficar
In Part 2 of a two-part interview series, Mona Zulficar, Founding Partner of Zulficar & Partners, gives her assessment of the most pressing issues facing Egypt’s legal ecosystem and how the development of this environment as a whole will affect economic growth within the country.
LT: The Egyptian legal landscape appears to be developing in interesting ways. How would you characterise the environment and how do you think it will continue to develop in the future?
MZ: It has developed a lot. In many ways, in the 80s it was more difficult. You had to do everything on paper; you didn’t have developed digital systems or the internet to check the law on your mobile. Our primary form of technological equipment was the word processor, but now many things are easier and quicker; it is really possible to access all the major knowledge banks and legal libraries in the world. In the 80s and 90s we had no reliable database of Egyptian laws and in fact we actually helped to create such a database. We were fighting left, right and centre to help the legal profession in Egypt develop and offer access to this kind of information.
Now we don’t have these kinds of difficulties. In many ways, the younger generations are luckier in terms of having access to different kinds of legal education and resources.
But of course the business now has new challenges; there is never a dull day in this profession. You have all kinds of new products being developed in the banking world, the digital world and in every kind of industry. All these products have to be “Egyptianised” so you have to find a way to ensure they can be introduced into and fit within the Egyptian world of law.
If you are a banking and finance lawyer, you know that banks are continually introducing sophisticated financial products or derivatives, which cannot be automatically introduced in Egypt or online under Egyptian law, so you have to figure out how to tailor these products and work with them. I have been responsible for introducing a lot of new products, as well as offering legal opinions and advice, not based on any precedent or doctrine in Egypt. This is because of my wish to help our legal community and country open up to those products that develop Egypt’s financial and capital markets.
So working within this environment has always been full of challenges – in the 80s and 90s because of access to resources, and now because of the development of the legal-business world.
LT: The government seems to be working hard to draft new legislation and bring about reforms in certain areas, particularly related to enhancing Egypt’s economic environment, and to clarify, for instance, issues related to tax and investment. From your perspective, what are the priorities when it comes to drafting new legislation and what do you think its impact will be for people working in important economic areas?
MZ: The new Investment law and the new Industrial Licensing law are for me the most significant new areas of legislation. But the optimum strategy, in my view, relates to what I would term the Golden Triangle: the Investment law, the Industrial Licensing law and judicial reform. The work being done on the new Investment law is crucial in terms of doing business, getting approvals and clarifying the applicability of regulation. The Industrial Licensing law is a core part of promoting industry, not only for large projects but also for SMEs. In addition to these steps, the judicial system should be subject to certain reforms in order to inspire greater confidence in the system. Inspiring greater confidence in the effectiveness of the judicial system, of its fairness, efficiency and stability, would be a major incentive for investment in Egypt – not only for foreign investors, but for Egyptian investors. The efficiency of the system needs a lot of work.
In the 90s and the early 2000s, there was an important development which I personally worked on and that was the establishment of the economic courts. Now everybody wants to go to the economic courts because the process there is quicker, more efficient and you have more specialised judges. So this is an example of the kind of initiative I am talking about.
We also lobbied for specialised family courts, which have helped to resolve critical family issues in a socially responsible manner and helped to eliminate inefficiencies in the system.
If we could apply such reforms more broadly, I feel it would be an important complement to the great legislative reforms the government is already enacting with regard to the new Investment and Licensing laws.
I believe very strongly that all law firms have a responsibility and are in fact playing an important role to help develop the legal and judicial ecosystem, in such a way as will reinforce the rule of law and promote investment. If there is a law that exists and has not been enforced, we should push to enforce it and to make sure it is observed. This will encourage and promote investment in Egypt so it is really in the best interests of our country.
LT: With one of your areas of expertise being M&As and corporate restructuring, do you feel the environment for M&As and joint ventures has changed during the time you have specialised in this field? What do you think are the factors affecting this?
MZ: This issue absolutely goes hand in hand with the economy. When the economy is in good shape and growing you have more M&As, a flow of FDI (foreign direct investment), as well as regional and international investors coming in through joint ventures. So there is always an increase in M&As when the economy is growing and the curve goes down when the country is facing a crisis situation. The same applies to IPOs (initial public offerings): you have a lot of IPOs when the economy and the markets are up.
In past years we typically had more acquisitions than mergers. Now we’re seeing more mergers coming into play – with ideas of consolidation, cost reduction, increasing the efficiency of operations, and allowing for consolidation in terms of creating larger projects with more potential for growth all being important factors in this issue. Mergers at the global or regional levels also often translate into mergers at the local level. So it is an interesting change to see mergers now on the rise.
Generally speaking, I would say that the number of M&As taking place is growing, which is a good sign that the economy is growing and that Egypt is becoming more attractive to investors.
LT: Has your experience in this area of M&As fed into or impacted the process of leading your own law firm and institution building? How are institutions in the legal ecosystem changing?
MZ: We definitely learn from our clients as well. We have been very lucky, working with major multinationals and major global banks. In the Egyptian banking world, we have generations of bankers who are professionally very strong because they were well educated and trained, having worked with major multinational banks, and they have transferred their knowledge and experience to a cohort of bright, brilliant, young Egyptians.
Our clients’ needs impose on us the need to acquire skills and knowledge to be able to offer them sound, comprehensive advice. It is imperative that we satisfy the needs of our profession in a world that is changing every day. We face such challenges all the time because, with constantly developing products and new types of contracts, you often cannot find examples or guidance in the court precedents, doctrines, references, the school of law, or the books.
So you have to work hard to develop advice based on the principles of law and market practice locally and internationally, in order to develop solid advice based on your own work, experience and assessment – and not necessarily that of established doctrine or jurisprudence. This is a serious responsibility and the only way to do it well is to build an institution based on specific lines of specialisation. This way, we have in our firm partners and associates of the calibre and experience to move quickly with our clients, just as our clients are moving quickly in their industrial, or digital, or banking, or service delivery worlds. We also have to train our associates – on the job and otherwise – in order to build second and third lines able to cater to the various needs required from our profession. We cannot serve this kind of clientele without specialisation, building human resources and support systems, working together as a team to serve the various needs of any corporate client as an institution.