Canadian Legal Market Merger Implications

Posted in: Strategy Started by

Canadian Legal Market Merger Implications

For years, international legal behemoth, DLA Piper, has been courting a number of Canadian law firms looking for a willing bride. After a number of rumoured dalliances, it was announced last week that an impending merger will happen in April 2015 with Vancouver-based Davis LLP.

Those in the Canadian legal market who have been awaiting this news can now afford to relax.

Or can they?

Baker & McKenzie has had a Canadian presence in Toronto since 1962, and British-based Clyde & Co. opened a Toronto office in 2011.

The arrival of DLA Piper comes hard on the heels of other global giants that have cannon-balled into Canada in the last four years, such as Norton Rose Fulbright and Dentons that, with offices in a number of Canadian cities, have managed to sprawl across the country and beyond.

Like Ogilvy Renault LLP and Macleod Dixon LLP that merged with Norton Rose in 2011 and 2012 respectively, and Fraser Milner Casgrain LLP that joined Dentons in 2013, Davis will surrender its name in exchange for an alliance with a 4,200-lawyer mega firm with international scope.

As the first-mover in the Canadian-International merger shakeout, Ogilvy Renault captured both imagination and awe when, as a second-tier firm, it vaulted a league of top-tier Canadian firms to join a global tier-two firm, Norton Rose, as part of a series of mergers that would result in Norton Rose Fulbright. Shortly afterward, Fraser Milner Casgrain followed suit with Dentons. And now Davis with DLA Piper.

With global firms operating in Canada, what are the implications for Canadian Big Law firms, such as those that claim top- and second-tier status? Will sameness continue to be the safety position along with hunkering down and hoping the evolutionary madness passes? Or will there be a bursting out of brand differentiation – innate to each firm with the verve to let its colours fly – along with adopting new lean legal structures, such as those being hatched elsewhere in the world with enormous success?

As legal work shrinks, alternative legal services flourish, and global firms expand and take root, tension within the legal community, in particular Big Law and to some extent Mid Law, can’t help but tighten.

This evolution is not a trend; it’s a reckoning. It’s happening now and has been for some time.

As with any transformative age, there will be those that stumble and fail as well as those that survive, often in another form. The survivors who thrive will be those that act with firm resolve on the understanding that change affords advantage and fortune favours the audacious.

4 Comments

  1. Colin Cameron Reply

    Great piece, Heather. Things are certainly heating up in the Canadian legal market and there’s more to come. The global giants’ impact will include more emphasis on lean principles and fixed fee pricing. They will bring huge resources to bear and put more pressure on other large Canadian law firms to change their business models to compete with these forward looking global firms. More mergers are inevitable, as the giants battle it out for the most lucrative legal work. It happened with the accounting firms 40 years ago as they went global using similar verein structures, and it’s finally happening in the legal industry now.

  2. Lisa Dawson Reply

    Agreed. Colin and Heather, you both point to operations (in addition to differentiation) as the area of major consideration when it comes to holding one’s thin stake and driving it deeper to secure market share. From my vantage point as an Administrator, I see the legal resource guide of our immediate future being the “lean six sigma” approach to real business management. A value-based framework of assessment looks at value prioritization, work allocation, implementation and measurement in order to improve process quality and eliminate waste. Have either of you used this approach successfully with law firms? I know of other professional services already following a variation of this prescribed path to success.

    • Heather Suttie Reply

      Thanks for your comment, Lisa. Yes, I’ve used project/business management approaches to improve efficiency. These processes are not turnkey solutions however, and must be customized to each firm that has the audacity to undertake such an initiative and the grit to see it through when the going gets tough.

  3. Dr Stephen Moss Reply

    This is a great article about the Canadian legal services marketplace. It rather mirrors what has happened in Australia and Asia of late. Heather obviously has a great grasp of the area! Congratulations!

Leave a Reply