Why Linklaters won’t go for an alliance in Canada

No tie-up: Linklaters knows Canada is a different kettle of fish from SA and Oz

Shocking as it may seem to someone viewing the world from the perspective of the Square Mile, but there are differences between Australia, South Africa and Canada, resources and energy opportunities aside.

The assumption that Linklaters would follow up its alliance deals with Australia’s Allens Arthur Robinson (now Allens) and South Africa’s Webber Wentzel with a similar deal in Canada was wrong. The lesson? Never assume.

graph

The magic circle firm has many friends in Canada and no plans to replicate the tie-ups there, largely because the market is more spread between firms with specialisms and regional focuses. Meanwhile, close ties with its noisy neighbour – and the reliance on US referrals – make merging dangerous. Of the top outfits, only Macleod Dixon, Ogilvy Renault (both now Norton Rose) and Fraser Milner Casgrain (Dentons) have linked up with foreign firms, while all the so-called ‘seven sisters’ remain independent.

“In looking at all markets, we’ve not considered seriously an alliance in Canada,” says corporate partner Ulrich Wolff, who looks after Linklaters’ Canadian relationships out of Frankfurt. “The Canadian market is very developed – there are a lot of really good firms, all of which we work with,” says Wolff, who is Canadian-qualified. “[Our strategy] works well – we don’t see any compelling reason to change it.”

Other Linklaters partners say the firm has contemplated an exclusive referral deal, but came to the conclusion that the Canadian market is so horses-for-courses that a new strategy would be foolish.

Thomson Reuters data shows the firm has acted alongside eight Canadian firms on 20 M&A deals since the start of 2010, with Toronto-based seven sister duo Blake Cassels & Graydon and McCarthy Tétrault joint top on six Linklaters outings each. Bennett Jones is the regular firm for Glenstrata work, while the McCarthy collaborations were largely for resources clients.

Unless Canadians start merging among themselves, Linklaters is unlikely to start breaking up any of these relationships.