Ever wondered why so many law firms in Ghana are, to a large extent, clustered in Adabraka, a suburb in Accra? There is a reason for this, and it is based on the concept of agglomeration. In my new article, I discuss the legal practice management concept of agglomeration as it pertains to Ghana’s legal service landscape.
Introduction
While some may refer to Adabraka as the Wall Street of Law practice in Ghana, others classify the locality as a growing hub for lawyers and law practice in the country. Adabraka, one of Ghana’s commercially vibrant areas, is a central location, surrounded by Accra’s business and public sector district. The locality is surrounded by strategic and tactical business entities, including companies from the pharmaceutical, telecommunication, healthcare, education, transportation, and finance sectors.
Accordingly, in every business endeavour of which legal practice is of no exception, there are instances where corporations or companies operate within a specified locality. This is what is termed agglomeration. In management, economics, and corporate governance, the term agglomeration refers to an instance where firms within the same industry operate from a common geographical area.
Types of Agglomeration
Consequently, there is a need to understand that within the confines of management and economics, there are two main forms of agglomeration. These include:
- Agglomeration which emanates from industry concentration (localisation economies).
- Agglomeration, which stems from the concentration of economic activity in an area (urbanisation economies).
Characteristics of Agglomeration
In agglomeration, the following essential characteristics can be witnessed:
- The operation of businesses or firms.
- The operation must be within the same geographical location.
- The businesses or firms must provide the same services. Thus, there should be a provision of competitive or complementary services.
Importance of Agglomeration within the Legal Space
The benefits associated with the agglomeration of the legal sector include:
- Enhanced Capabilities and Service Scope: Through collaborations and connection building, firms within a common geographical area can, to a larger extent, offer a much wider range of legal services. Firms within a specified geographical location enhance the sharing of ideas, especially in instances of complex disputes and major corporate transactions.
- Increased Market Reach and Regional Footprint: Agglomeration allows firms to rapidly expand their geographic presence, moving from local players to regional powerhouses by virtue of recommendations from other lawyers within that specified geographical zone. This is particularly beneficial for serving multinational clients with operations in multiple countries. The strategic alliance between firms, by virtue of agglomeration, encourages partnerships in offering seamless services across the continent.
- Exchange of Best Practices and Innovation: It is important to understand that, when separate teams integrate within a common geographical space, they bring different skills and working methods, fostering innovation and improving internal processes through the sharing of ideas. Here, firms that are best known for a specified area of practice may easily be recognised and approved by other firms.
- Stronger Brand and Competitive Edge: For smaller firms, merging with or joining a larger network provides an opportunity to be part of a stronger, more recognisable brand. This enhances their ability to attract international clients and compete with larger firms.
- It builds a community of highly sought-after professionals who share a common sense of professional values and professional communal development.
The Law on Unfair Competition: A Solution to Challenges of Agglomeration
Undoubtedly, agglomeration may lead to unfair competition. This section of this article provides an understanding of the Ghanaian laws on unfair competition, specifically, the Unfair Competition Act, 2000 (Act 589), as a solution to the challenges posed by agglomeration within the Ghanaian legal ecosystem. It is important to understand the following:
1. Causing confusion with respect to another’s enterprise or its Activities. (Section 1 of Act 589)
Section 1 offers a clear understanding of the subject of causing confusion with another’s business. This section highlights areas where confusion may be caused. Areas of confusion may be in respect of trademark, trade name, a business identifier other than trademark or trade name, the presentation of a product or service or a celebrity or known figure. The essential nature of this section is to protect the unique identity of businesses or firms and ensure that business institutions preserve their customer base.
2. Damaging another person’s goodwill and reputation. (Section 2 of Act 589)
It is essential to note that an act that damages the goodwill of a brand or business of another, whether or not through causing confusion, amounts to unfair competition. The framers of Act 589 understood that reputation and goodwill are great assets in Commercial or business activities, thereby promoting a conducive environment for businesses to thrive and leading to growth in National development.
3. Misleading the Public (Section 3 of Act 589)
An activity that seeks to mislead or is likely to mislead the public is deemed to be unfair competition. Essentially, this can be seen in business advertisements or promotions. Misleading the public is a way businesses may take advantage of customers or clients who, in one way or another, may not pay attention to details.
4. Discrediting another person’s enterprise or its Activities. (Section 4 of Act 589)
This may be portrayed through unjustifiable allegations, primarily in the context of commercial or business activities that disrupt or are likely to disrupt the business of another. This section establishes a secure business environment, free of false assertions aimed at advancing the growth of a particular entity within an industry.
5.Unfair competition in respect of secret information. (Section 5 of Act 589)
To disclose the secret information of another person in line of industrial or commercial usage without the consent of that person and in a manner contrary to honest commercial practices constitutes an act of unfair competition. The framers of Act 589 recognise that businesses’ trade secrets are their commercial assets and that no one can reveal them without the consent of the owner of the said information. Also, Act 589 further explains what may constitute secret information in Section 5(3).
Remedies Available
Section 8 of Act 589 lists the remedies available for an action constituting unfair competition. These include: an order of injunction, a provisional order to prevent unlawful acts or preserve relevant evidence, an award of damages as compensation and any order the court may deem just and fit.
Conclusion
In conclusion, agglomeration is more of a commercial blessing than a curse. The Adabraka effect over the years has transformed and affected the scope of legal practice in Ghana by virtue of practical examples from the assertions made in this article. Moving forward, firms must endeavour to work in harmony with other firms so as to maintain an internationally acclaimed means of legal practice.
By Nana Bempong Esq.
