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Norton Rose to merge with Canada's Ogilvy and South Africa's Deneys

Until the last few years, no major Canadian law firm practiced in Saskatchewan. (In fact, even operating in Calgary is a relatively new experience for quite a number of the country's largest firms.) The Canadian legal professional is incredibly conservative and quite restrictive (try re-qualifying as a solicitor into the law society of Ontario, for instance). This merger might have a very significant impact on improving the provision of legal services in Canada. For far, far too long, Canadian firms have had sizeable headcounts, poor profitability and no real outside competition to challenge their domestic market. (With no real international capabilities, it seems pointless to raise the issue.) The question now becomes how the so-called Seven Sisters (the major Canadian law firms) respond to the Norton Rose entrance. If separate profit pools are to stay for the forseeable future, the impact might be less significant than if profitability was to be centralised. (Even with NR's drop in PEP last year, for example, it would still be paying out quite a bit more than the most profitable Canadian law firms.) The one thing that will surely hurt NR's standing in Canadian legal circles is their non-existent US base. Given Oglivy's strong links to Jones Day, this might well be an attempt to leverage that relationship, but the sheer number of client conflicts between NR and Jones Day might be a sign of some looming trouble. From the rumblings I've heard in Canada, I suspect another major UK entry in the next 18 months is almost certain. (Queue those British firms - A&O and Clifford Chance - that have long standing relationships with Canadian clients.) Interesting times.

17-Nov-2010

2:15 am