IFLR 1000
The Guide to the World's Leading Financial Law Firms

"Political turmoil, social disruption, political heat, labour strikes and a big vacuum in the constitutional system: no parliament and no president." This is one partner's description of the months following the revolution of January 25 2011 which culminated in the arrest of Hosni Mubarak, the country's president for 30 consecutive years....

"Political turmoil, social disruption, political heat, labour strikes and a big vacuum in the constitutional system: no parliament and no president." This is one partner's description of the months following the revolution of January 25 2011 which culminated in the arrest of Hosni Mubarak, the country's president for 30 consecutive years. A military council-led interim government is in place until elections, due in late 2011.

"Due to the revolution there has been a complete blackout period, our litigation department is swamped," says a local partner, "companies are being investigated in criminal investigations, so they can't be doing business as usual and if you are a company executive under investigation you are going to put all your effort in defending yourself".

Another local firm is busy with "litigation over labour issues from strikes and demonstrations, dispute and regulatory work for clients to make sure they are not in violation of anti-corruption laws; the typical reaction is: we have investments there, who are the owners, are they in any way connected to the regime, is there any chance that funny business happened?" Another lawyer describes how "the government is reopening every single privatisation in the last decade... there is a huge investigation into the property of real estate developers in tourism and residential and new land allocated by the government: the pricing, what were the relationships and cancellation of allocations".

Heads of investment banks, high profile service providers, industry leaders and banks with ties to the Mubarak family have all come under pressure, while on the public side "all of a sudden not one official wants to sign anything, no one wants to take responsibility for anything," notes a lawyer. The events have also shut some avenues for funding: "banks are very reluctant, they lent a lot of money to people who are now in jail, to big tycoons who are out of the country, and the tourism business is hurt".

Meanwhile some commentators see the investigations widening in scope and even speculate that "it could open the door for the liability of lawyers... many things were done in an improper way, maybe they will be uncovered," says one partner.

Perhaps surprisingly, some lawyers report activity and say clients are watching for opportunities. In mid-2011 banks did start to "pump money back into the economy, they have shown a lot of resilience", says one partner, and the Ministry of Finance has announced new public-private partnership (PPP) construction projects under the country's new January 2011 PPP law, so firms are gearing up for project finance. "There are sweet spots for post-election," says a lawyer, "so they [clients] need to get their ducks in a row... providing there is a euphoric atmosphere".

One firm notes that private equity is on the move. "Some clients have not been putting plans on hold," says the partner, "I didn't expect it of US firms, but they have very sophisticated fund managers here, top level guys who feel that no matter what happens politically property will be safe, there is no prospect of a socialist government to take that away, the Muslim Brotherhood is capitalist in nature, it will not affect PE investment".

By and large, the definite consensus is that in the run up to the revolution it was business as usual, with only a few commentators claiming that corruption and cumbersome and erratic bureaucratic procedures were increasing. One client complains of having deal with piles of official papers each needing a 15 day wait for a stamp.

In general there is feeling of hope among firms that certain practices and the gap between law and practice will close; that the economy will open up more, that there will be new players and increased competition, and that more "transparency" will give a boost to Egypt.