Capitalising on foreign interests
27 August 1996
The past year has been one of the best for Canadian law firms in recent times. The top practices have seen an increase in business, from mergers and acquisitions to initial public offering work. The real estate market has also picked up, although litigation shows only sluggish signs of recovery.
According to Goodman Phillips & Vineberg marketing director Jim Bliwas: "The top 10 firms are having a good year, a few of us are having a very good year and small boutiques are doing very well." However, he added that medium-sized firms were still suffering.
Overall, the previous five years have seen mixed fortunes for law firms with only the largest expanding their practices overseas. Although firms opened up foreign offices, particularly in South East Asia, China and Hong Kong proved unattractive to Canadian businesses, so these firms did not do as well as expected. But renewed interest in China in the last year means the country is once again proving attractive.
While some firms have expanded globally by opening foreign offices, others have set up joint ventures to deal with their international needs. One link-up, which came to an end earlier this year, was between Quebec-based Ogilvy Renault and Toronto's Osler Hoskin & Harcourt.
The two firms forged a link in 1989 to set up a separate international partnership to operate outside Canada as Ogilvy Renault. The firms were joined by Vancouver-based Ladner Downs in 1990. However, results were not as good as expected and Ladner Downs left three years later.
The breakup this April is partly due to Ogilvy Renault's plans to set up a Toronto office. Observers said moving into Toronto was the only way forward for the Quebec firm which, like others in the region, has suffered from the province's constitutional problems. But as Ogilvy Renault and Oslers would compete head-on in Canada, it meant the international arrangement could no longer work.
Europe has proved difficult for Canadian firms, with most opting to work out of London. Blake Cassels & Graydon has an office in the city as have Stikeman Elliott, McCarthy Tetrault, Tory Tory DesLauriers & Binnington, and Borden Du Moulin Howard Gervais. And Oslers and Ogilvy Renault are still in the marketplace.
The past year has seen a number of moves in London. Oslers' London partner David Drinkwater has left the firm to head the legal department of Bell Canada in Toronto, while Ogilvy Renault's Michael Fortier has left the London office to build a 200-lawyer firm from scratch in Toronto.
Calin Rovinescu, head London partner of Stikeman Elliott, has gone to the firm's Montreal office, while long-standing Tory Tory partner Kathleen Keller-Hobson has also returned to Canada, replaced in London by Steve Marshall.
There is plenty of competition between Canadian firms for a small amount of Canadian work. According to Glen Ireland of McCarthy Tetrault, his firm has a "steady stream of work. We do our share in terms of Eurobonds."
The firm tended to focus on the issuers, he said, and was not as strong on the banking side as it was often conflicted out.
"It's a double-edged sword," explains Ireland.
McCarthy Tetrault also has been busy in cross-border mergers and acquisitions work. It provides advice for a number of UK companies, such as Unilever, RTZ, Rolls Royce, NatWest, Grand Metropolitan, Siemans, and Schroders.
The London office is now beginning to provide advice to European companies and banks in connection with the proposed privatisation of Ontario Hydro, the largest electrical utility and the largest privatisation in the US. It is also setting up a European practice group, consisting of eight lawyers in Europe and Canada. It will be led by managing partner Arthur Scace and will co-ordinate services in Europe.
The fiercest competition among Canadian firms in London is in the capital markets arena, according to William Scott of Stikeman Elliott. His firm, which practises capital markets work, mergers and acquisitions, securities and banking work, has been involved in large corporate bond issues.
Recently it was involved in transactions such as advising Hollinger International on its buy-out of the minority shareholders of The Telegraph, advising the UK Department of Transport on Canadian aspects of the Railtrack privatisation, as well as advising Ashanti Goldfields on Canadian aspects of its acquisitions of International Goldmines and Golden Shamrock Mines.