Interview with Egyptian Lawyer Karim Hafez (Part II): The Challenges of Establishing a Premier Law Practice in Egypt

Interview by Tamer Mallat – 2 July 2013

Karim Hafez

Karim Hafez

Karim Hafez is one of the leading lawyers in the Middle East, and is Senior Partner and founder of Hafez Law Firm, a premier trial firm and arbitration practice based out of Cairo, Egypt with offices in Paris, Doha and Jeddah. He obtained his PhD in law from Cambridge University, and has held teaching positions at Harvard Law School and the American University in Cairo, where he is currently Adjunct Professor of Law. ArabsThink has had the opportunity to interview Karim Hafez about his experience in practicing law in Egypt and on Egypt’s dangerous economic situation (Part I, click here for interview). The interview was conducted in June 2013.

You spent considerable time studying abroad in the UK and the US, and yet you returned to Egypt when many choose to pursue opportunities abroad. What drove you to come back? Could you speak a little bit about your experience opening up your own firm? Would you encourage other Egyptians to come back and invest in their country – despite the obvious hardships?

Karim Hafez: First off, let me tell you that my decision to come back to Cairo was not made for any altruistic reasons. It wasn’t out of the generosity of my heart or a commitment to the development of the legal profession in Cairo or the Middle East or the third world. This was a decision ultimately dictated by my own personal circumstance.  There came a point where I felt, whilst not at all alienated from, call it the occident, I didn’t feel quite at home and I wanted to recapture that sense of belonging. This has nothing to do with the practice of law, I just wanted to be home.  And that, to me, was the primary reason why I wanted to come back.  I wanted to engage in civil and political discourse as a stakeholder rather than simply as a concerned observer. So that was fundamentally why I elected to come back.

There were other considerations; militating against the decision to come back was the desire to pursue an academic career.  The academy in Egypt is effectively nonexistent in any real sense of that term. The seats of learning dedicated to rolling back the frontiers of human knowledge aren’t self-financed or state-financed, effectively placing Europe in a position where you can do reasonably well but also do good.  That wasn’t an option in Egypt so if I wanted to stay in the academy, I would have had to stay overseas.  But for reason number one I elected to give that up.  The options weren’t particularly attractive truth be told, I would have had to teach in the US, which I wasn’t particularly keen on.  At worst, I was prepared to contemplate life in the UK, France, and Switzerland, but that wasn’t available in my own case.  Each had a hierarchy and I didn’t quite fit anywhere.  So in a sense, the decision to come back to Cairo was also partly for lack of an alternative.  I wasn’t keen then and I’m still not keen now on working for one of the larger international law firms, it seemed to me fairly colorless going on soulless.  I say so recognizing that the type of work that is done there and the quality of individuals who populate this universe are of the first degree.

This is how I felt at the time, it was unattractive, it seemed to me like a sweatshop. I felt I was going to be a miniscule cog in a humongous wheel, and that wasn’t especially attractive.  So that led inexorably, as it were, to ordering a flight back to Cairo.  It had been too long as well, I had been away for seven years and I just felt it was the right time for me to come back, I was very attached to my parents, I brought the family and I just wanted to be here.  So sort of a confluence of circumstances led me to heading back to Cairo.  The reentry was very difficult because Cairo was not as I had remembered it; it was in part because the city had changed and because my perception of it had changed.

We had drifted apart, the city and I, we were no longer as much in communion as I had remembered us as being, and that was a very difficult transition. It was, to put it very mildly, testing and challenging in more ways than one, not professionally, but socially and intellectually I felt very much alone. I felt that I had ended up with the worst of all worlds.  I was a foreigner at home and that’s just a horrid feeling.  It wasn’t so much that I was all of a sudden parentless or friendless, but there was a huge chasm between my perceptions and expectations and that was broadly shared by people who populated my immediate universe.

That wore off over time and I’m glad to say that it has now been resolved. It resolves in a number of ways, in my case by constituting my own little balance and keeping some of the more uninteresting social influences at bay. Sometimes it is a process of mutual acceptance that resolves in a new communion being entered into.  So that was socially. Professionally, there was no one I wanted to work for.  I started teaching at the American University in Cairo. It was primarily a teaching institution and not a research university so that wasn’t a lot of fun, it was very poorly paid and the student community wasn’t necessarily all I had hoped it would be.

Was it a bit of an extraterritorial institution?

Karim Hafez: Extraterritorial is one way of putting it.  It was a cultural implant and teaching law, unless you taught international comparative law, in a language that isn’t that which is spoken, in which the practice of law is engaged in, seemed somewhat artificial and the linguistic barrier was a significant one.  People otherwise would have fit in nicely and would have contributed, it would have been a great experience for myself and others.  For these reasons I wasn’t happy to do that on the long term, and therefore, once again, there is a funneling effect you have to constantly whittle down the available options until you have the fairly obvious choices of doing nothing or taking up the practice of law.  And when I knew that it was going to be the latter, practicing law is what I started doing.

I started with a very different set of assumptions and expectations and even objectives. I wanted to recreate the practice of law as I had imagined it, that is, classically, by which I do not mean classical antiquity, I meant up until the 1950s and 60s. I was very interested in trial work, and I was uninterested in transactional practice.  There was a big part of me that felt that law is properly practiced in the courtroom and not in the boardroom. Obviously I recognize that I am prejudiced in that department and it may be that I enjoyed listening to the sound of my own voice, or that advocacy is how I conceived the practice of law, so the choice was fairly natural to me.  I had also done a PhD in arbitration so it just made sense to stay within the contentious universe. I started off wanting to practice independently and I didn’t have the option of doing chambers so I just put on my shingles and had a small law office of about 40 odd square meters, which was just large enough for myself and a secretary.

Before I knew it, I was actually quite busy and needed help, so I ended up recruiting one lawyer and then a second. And about a year, 18 months, into the process it was time to move to a larger set, so I took out a new lease and the rest was history. Effectively we went from 40 to 1400 square meters in a space of about 8 years.  And it has not been necessarily linear but it has been more or less inexorable.  Looking back, it all looks like it was a part of a plan; in fact it was anything but.  The decisions were made piecemeal, sometimes à contre coeur, and sometimes without a full appreciation of their effect and impact.

For instance, my role in what has now become an organization has changed radically from what I perceived I would be doing at this point in my professional life.  At the moment there is a great deal I do that I did not formerly manage in the practice, for better or worse. A great deal I did back then I seldom have to do now and in some cases just as well, such as writing witness affidavits, which is not my idea of fun and I’ve done enough of that to last me several lifetimes. So this gets us to the present day and you can see the choices were sometimes made because the alternative was particularly unattractive and looking at it I am left with a certain sense of satisfaction, but there was certainly no plan to it.

In many ways, the structure and operational framework of your firm represents an exception in a region where institutions and companies are more than often mired by endemic corruption, inefficiencies and poor working conditions. How has creating ideal conditions for work, and a culture of respect within the firm, contributed to providing quality legal services and resulted in increased economic output?

Karim Hafez: To be honest, I was a good copyist. I looked at what others did, firms of more established pedigree and what I did amongst other things was read firm histories.  Several of the larger firms have published histories of their institution’s development.  I read innumerable manuals about how to start your own law firm and how to structure the various departments, so this was all fairly mind numbing, but I did it because there was no alternative.  You couldn’t get consultants in Cairo to shine a bright light and clarify things.  I didn’t have big law firm experience to draw upon, I had worked for Clifford Chance very briefly over a summer and so it was very much all second and third hand and when I could afford it I would bring in consultants who do what consultants do, which is tell you what they’ve done at their last job.

I read what was available publicly and made enquiries with friends and colleagues, and I borrowed very extensively from online resources. And sometimes I would just come up with things that seemed to make sense through the well-worn process of trial and error, I would discard some and retain others depending on how well they fared the test of human experience.  And whilst I recognized that we’ve come a long way the last 8 years, I also recognize that we’ve got a long way to go, and in a sense, I’m now reconsidering what the model should be. I started off looking at magic circle firms, at White Shoe, New York, corporate law firms.

This was the prototype as it were and I would try and adopt their policies. I would look at what rules and principles they had adopted and I would customize them.  But over time I realized that there had to be a better fit so I started looking at trial law firms in the US. I was intrigued to see that some of the greatest successes are in courtroom battles. On the west coast there is Quinn Emmanuel Urquhart; we’re doing three cases with them coincidentally. On the east coast you had Boies, Schiller, and Flexner law firms, two law firms that may have the appearance of corporate law firms but in fact do nothing but trial law and that seems a better fit, so I started looking at those.

In a twist of irony, the moment when I’m seeking an image in which to fashion the practice I find myself increasingly looking at the individual practitioners on the Cairene circuit of legal practice where you have court room lawyers who are working very small informal sets, and increasingly their practice is turning out to be more relevant to our daily professional circumstances.  It is not really a case of jettisoning what I’ve learned from the others, but in an attempt to customize and localize I’m starting to see the wisdom of certain of the practices adopted by the much older and much, compared to us, smaller sets.

To give you one example, I’ve been toying around with the idea of potentially shorter working hours, that’s something that’s been the bane of life in the international law firms and I just can’t believe that that is the only way forward.  It may be that nothing will come of it but I know that there are social experiments of four-day weeks, still forty hours, not that lawyers work 40 hours, more like 80 but this is an area in which I’d like to a leaf from the old copybook of the traditional solo practitioner.   Case organization – the number of areas of potential inquiry that would be interesting to look at how old-fashioned lawyers and solo practitioners have gone about the practice of law.

Do you believe that Hafez can be an example for good governance and meritocracy in the Middle East? How do major companies and clients that you represent view your model?

Karim Hafez: Clients don’t know a great about what goes on in law firms. They care understandably a lot about results, but what goes into achieving those results is something of little concern to most of them.  I guess I cannot claim to have led the way in any significant respect so far as it concerns the practice of law in Egypt except perhaps in one or potentially two limited instances.  Our example shows that it is actually possible for a law firm to survive positively on the contentious practice of law.

People scoffed at the idea and wrote us off but they have come around to accepting that. I want to correct myself and say, in a sense we haven’t led the way in that department either, because all we’ve done is do what traditional solo practitioners have done for the past hundred odd years.  The only difference is that my personal profile did not match theirs and the structure I adopted and the processes I put in place were borrowed from the full service firm model and I was judged by the full service firm model proponents and they took the view that you cannot have a contentious practice solely if you adopt the structure and that turns out not to be true.

So I guess to the extent that we can claim any innovation, it is taking the structure, the processes and technological organization from the full service model and seeing that they work just as well for purely contentious practice.  So that’s just one obvious innovation that people will recognize we can have chalked up to us.  The other is much less obvious and probably dearer to me and that is the objective to create a highly energized intellectual environment where difference is prized and respected, where you are only as good as your ideas and where age was respected because it translates into greater experience is certainly one of a number of variables that go into determining whether an idea is good or not.  I guess being young when I started off meant that I had to do this because there is a great deal I didn’t know and I wasn’t going to start pulling rank on people who were demonstrably more experienced than I was.

It seemed to have led to a general environment that I fostered everywhere I could where people could vehemently and passionately disagree without losing sight of the overall objective of putting the best case forward.  I did that in a number of fairly crude and obvious ways and that is simply recognizing, on more occasions than I can recall now, that I was wrong and that I’d gone completely back to front, and if you do that often enough, people who are otherwise inclined to think that they are capable of only bright ideas start thinking that it is all right to not constantly and invariably be in the right.  The other way is going out of my way to encourage people, and specifically young colleagues, to speak their minds and to remind them that we’re here to disagree amongst ourselves so that we ultimately snuff out bad ideas rather than have the arbitrator or opposing councils do it to us in the full glare of publicity and have much more adverse consequences. So that’s something that I’m actually quite keen on.

The third and last one, which is actually a commitment, is to create an environment that is predominately secular in a society that was becoming less so by the day.  I was keen on this because I would not have been able to function otherwise.  Even that required a number of tradeoffs and a number of concessions to one’s liberal commitments that proved momentary but nonetheless quite real.  Once the tone of the place had been set we became much more tolerant of what could be perceived as, not necessarily a radical agenda, but nonetheless we were more comfortable having religious symbolism around that I would not have been five or six years ago.

Creating that atmosphere, although it is nothing to feel giddy about, was something of a minor accomplishment in modern day Egypt. I certainly felt it was a huge issue when I came.  To do this placed you in the odd position of discriminating in order to give effect to a fundamentally nondiscriminatory intent, and I’m not sure we did it right or if it was in retrospect justified, but there was a time where I felt unless we were especially vigilant we could compromise the general character of a fledgling firm.

Your story is an illustrious one. What advice would you give to young lawyers hoping to practice in the region?

Karim Hafez: It’s okay to fail.  It’s not my advice, it was advice given to me by another.  When I contemplated the practice of law independently, my father was already a practicing lawyer and inevitably we had family friends who were established lawyers themselves, and I met a number of them and they gave me all manner of advice, all doubtless and well intentioned.  One piece of advice stayed with me: that it’s okay to fail.  There is a great deal that we tend not to do because we are concerned about the ramifications of failure.

That advice came from someone who now has an established law firm that is larger and longer standing than ours.  He says it is the third firm he set up, and he failed the first two times.  It was not that he changed much or at all, it was a different set of circumstances and the right time and it just picked up in a way that its predecessors did not.  That, more than anything, helped me.  It was okay to fail and it shouldn’t undermine my sense of self and if it doesn’t work I’ll just consider alternative options that I can maybe achieve, such as go and practice with someone, leave law altogether, or try again.  And that is the quality that anybody contemplating going out on their own should endeavor to develop, especially when you’ve worked in an institution before, as you are spared the anguish of having to deal with society directly.

Your contact with the marketplace is mediated through the firm or the institution.  Institutions also tend to send you subliminal messages that it is dark, cold, and lonely outside if you dare step outside of their pearly gates, and I think that’s just not true. If you do not find an institution that suits you, go and found one and if it doesn’t work, well it doesn’t work.  It might or might not work and it just depends on a set of circumstances that you do not control for the most part.  To be sure, you must do your best, you’re going to shout whatever skill set you have off the rooftops and when you do get a case through the door you’re going to try to do the best you can for your client and ultimately for yourself.  But guess what? I think if I had one moment of something close to panic, it was on my first day in my first law office.

The builders had just left the day before, and when I came in the next day and all was spick and span: the fax was plugged in, the email was ready, the computers were on, the light switches had been flicked and I had a sign that said ‘avocat’ on my door, it didn’t have my name, as I thought it was elegant to not have my name.  It’s not as if you have walk-in customers, but then it struck me that nobody knew I was actually in there.  There I was sitting in a small apartment in Zamalek, an island in the middle of Cairo, fairly leafy, just across a club and nobody other than my mother knew I was in there.  The question was “where’s the work going to come from.” I thought: “Gosh, unless it happens to be somebody trundling up the stairs in need of a lawyer, I’m never going to get any customers, however good I might be.”  Veronica Fuentes, a very attractive Spaniard knocked on my door.  She had a short-term lease on the first floor – mine was the ground floor – and she did two things in her life: she represented a Spanish business publication, and she also acted in her spare time as an agent for Zara Mango and she was engaged in negotiations with the Egyptian Free Shop Company and needed a lawyer and could see that avocat probably meant abogado and just knocked on the way up.

So the first customer for which I received, in cash, the handsome sum of about 350 euros, the first entry in my red book of fees, was by someone who had retained me on her way up to her flat.  My next set of instructions was equally fortuitous, it was then the absolute largest arbitration that Egypt had known, about 6 billion pounds, a dispute regarding the restructuring of the debt of the Bahgat Group with a consortium of Egyptian banks, but that’s another story that I can tell you.

But you never know.  I still maintain that no matter how good or successful, this firm can collapse at any point in time, and if that happened it would be very unfortunate and I hope it never comes to pass and we keep going from strength to strength.  But if it did, that would be fine. We would start again.  That is, to me, the one piece of advice I would give to someone contemplating anything that could come within the broad intellectual parameters that we describe using the word entrepreneurship.

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