Burnt fingers

After past mistakes, few Canadian law firms have a taste for international expansionism, says Patrick Stewart. Patrick Stewart is a freelance journalist.

Stikeman Elliott opened for business in Sydney earlier this year. One of Canada's leading commercial practices, this is its fourth foreign office in the Asia/Pacific region and its ninth in the world. Four of the offices, including two in central Europe, were opened in the last five years. So is it a trailblazer, or merely eccentric in its approach to the international market?

With a global network spanning three continents, the firm stands out among its rivals for the breadth of its international coverage. “We have always believed in international business,” says London partner Kip Cobbett. “Nobody can deny that the practice of law is becoming a global business.”

That may well be the case, but few Canadian firms share Stikeman's taste for aggressive globetrotting. In fact, if anything, they are approaching the international market with increasing caution.

This is partly explained by the patchy track record of Canadian firms abroad. Some firms burnt their fingers when they tried to expand internationally. Offices have opened only to be shut down: McCarthy Tetrault in Hong Kong, Osler Hoskin & Harcourt in Singapore and Tory Tory DesLauriers & Binnington in Hong Kong and Taipei.

International joint ventures, formed at the beginning of the decade, when global aspirations were running high, have also came unstuck. As Osler Hoskin & Harcourt's Mark Traytrock notes, such co-operation was viewed as a way of servicing international clients while underwriting the substantial costs of opening foreign offices.

At that time a number of new names emerged on the international circuit: Fasken Martineau Davis, Osler Renault Ladner, Goodman Freeman Phillips & Vineberg, and Tory Ducharme Lawson & Lundell. But in the ensuing years tensions emerged in some of the configurations. Tory Ducharme Lawson & Lundell, which at its peak operated three joint foreign offices, started disintegrating when the Vancouver member firm Lawson Lundell Lawson & McIntosh decamped. The Montreal member Desjardins Ducharme also later left, leaving Toronto's Tory Tory DesLauriers & Binnington to run the remaining London office.

Following a similar pattern, Vancouver's Ladner Downs was the first to leave Osler Renault Ladner. Then Montreal's Ogilvy Renault scaled back its participation so that, by the time of the joint venture's dissolution last year, it was only involved in the London office.

In a similar move, Vancouver's Davis & Company left Fasken Martineau Davis. It wanted to open a Tokyo office but its partners were not keen. Toronto's Fasken Campbell Godfrey and Montreal's Martineau Walker still jointly operate their London office as Fasken Martineau. Such disappointments drove home the differing foreign priorities of Canada's region-based firms and also added a dose of realism to the international expectations of Canadian firms.

The largest firm in Canada, McCarthy Tetrault, has one foreign office: in London, which remains popular with most top Canadian firms as a base in the European time zone. McCarthy partner Glen Ireland reports an increase in work from the US, Africa, Latin America and the CIS, but does not see sufficient demand to justify opening more offices: “Is having a wide network of relatively small offices providing Canadian legal services the way to go? Our judgement is that it isn't.”

This is not to say that firms are ignoring potential opportunities. Fasken Martineau's John Elias reports that one of his firm's partners is on secondment at the European Bank for Reconstruction and Development, and that the firm is looking at openings in the east European market.

It seems that like their US cousins, Canadian firms are being much more selective in the markets they are targeting, and not so much trailblazing as keeping on a tighter track.