DLA Eyes Canada After Heenan Blaikie Goes Bust
Cameron, the Vancouver-based legal consultant, says the arrival in Canada of global legal giants like Dentons, DLA and Norton Rose will force local firms that feel overmatched to reconsider their place in the market. Many of the country's mid-tier firms are already facing the prospect of slashing their hourly rates to compete with legal services firms like Toronto-based Cognition and Montreal-based Delegatus, adds Cameron, an accountant and longtime former COO for top Vancouver firm Clark Wilson.
While many U.K. and U.S. firms are familiar with such financial pressures, Cameron says their Canadian counterparts have been less receptive to adopting the alternative fee arrangements increasingly favored by in-house counsel, something he expects will soon change.
Not everyone believes the failure of Heenan Blaikie should be used to draw broader conclusions about the state of Canada’s legal services industry.
“The Heenan Blaikie story is more a function of things specific to them than a reflection of the national firm model as a whole,” says Oslers chair Clay Horner. He notes that 10 to 15 years ago, many Canadian firms did not have class action defense practices. Changes in provincial laws in recent years have opened the door for such suits, something Horner says has helped larger Canadian firms move away from feeling “underweighted in litigation” during transactional dry spells.
Gowlings’ Jolliffe and Davies Ward’s McReynolds echo the idea that the national firm model in Canada is here to stay, noting that the arrival of global firms that have traditionally referred cross-border work to Canadian colleagues has helped upend the status quo. Norton Rose's entry into Canada in 2010 spurred a mini-merger mania, as midsize firms McMillan and Lang Michener announced a combination, while Toronto-based Miller Thomson expanded into Saskatchewan by acquiring 30-lawyer Balfour Moss.
But aside from Dentons' merger with FMC last year, most of the expected market consolidation has failed to materialize. Horner adds that Oslers has been approached several times by foreign suitors about a potential combination, but notes that his firm recently conducted a strategic review and has chosen to remain independent.
"We benefit greatly from a multiplicity of U.S. [referral] sources," he says. "We're happy where we are."