DLA Eyes Canada After Heenan Blaikie Goes Bust

, The Am Law Daily

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Toronto's Bay Adelaide Centre, home of Heenan Blaikie

UPDATES: 2/7/14, 7:30 p.m. EST. The Globe and Mail reports that DLA Piper's talks with Heenan Blaikie partners have been suspended. 2/10/14, 12:50 p.m. EST. DLA has called off its discussions with Heenan Blaikie lawyers.

Buffeted by a wave of partner departures, Heenan Blaikie, one of Canada’s most prominent firms, announced Wednesday night that it has embarked on an orderly “windup” of its operations.

In a statement on its decision to close its doors in a process likely to last several months, Heenan Blaikie said it had explored various restructuring options—including the spinning off of certain offices and practice groups into freestanding firms—in hopes of surviving. Instead, it will become the first truly national Canadian firm to dissolve.

“For over 40 years, Heenan Blaikie has been a leading player on the Canadian legal services scene,” the firm said, while promising that all client files would make a smooth transition to new homes. “Heenan Blaikie would like to thank all the clients who put their trust in the firm over the years, and all the lawyers, professionals and employees who served it well for more than four decades.”

For Heenan Blaikie—which had 500 lawyers and 600 staffers spread across nine offices in Canada and an outpost in Paris a little more than a month ago—the fall came quickly once its partners began bolting. The firm's collapse has some Canadian legal industry observers raising questions about the market's underlying health as top local and international firms recruit from the ranks of the newly displaced.

In reporting on a leadership transition at 4,000-lawyer DLA earlier this week, The Am Law Daily noted that the firm was in discussions to take on Heenan Blaikie partners in Calgary and Toronto. Roger Meltzer, the head of DLA’s global corporate group and cochair of its Americas arm, confirmed Thursday that his firm is in “serious negotiations” about hiring between 55 and 70 Heenan Blaikie lawyers in both cities.

“Both sides have a sense of urgency to get a deal done or begin the process of moving on,” says Meltzer, who will become a DLA coleader next year. “It won’t be a straight merger, but it will be a commercial combination, and these [Heenan Blaikie lawyers] would form the basis of a DLA Canada.”

Meltzer says DLA has hired Toronto firm Aird & Berlis to advise on various aspects related to adding a Canadian component. Accounting issues, lease obligations and concerns about how DLA Canada would fit into the international behemoth's Swiss verein structure have yet to be worked out, says Meltzer, who notes that DLA general counsel Peter Pantaleo and global energy chair Robert Gruendel are meeting with Heenan Blaikie partners.

DLA has long sought to establish a Canadian presence, and Meltzer says he is keen to stop referring work to Canadian shops that his firm—the world’s largest in terms of both gross revenue and head count—could handle if it had a base north of the 49th Parallel. Meltzer says Canada’s natural resource and energy sector is particularly attractive to DLA and that he is intrigued by Toronto's “interesting capital markets approach.” (The country’s financial capital features stock and venture exchanges that dovetail with DLA’s transactional and litigation practices.)

Heenan Blaikie’s former co–managing partner Norm Bacal—a well-regarded tax and entertainment law expert who founded the firm’s Toronto office in 1989 and moved back into a leadership position last year as its struggles gained steam—did not respond to a request for comment about the talks with DLA. Nor did current Toronto-based co–managing partners Robert Bonhomme or W. Kip Daechsel.

The negotiations between Heenan Blaikie—home to legal luminaries like former Prime Minister Jean Chrétien, an Ottawa-based counsel for the past decade—and DLA grew serious late last month when it became clear the Canadian firm was unlikely to survive on its own.

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