It is an urban legend, of course, but it is also true. The story illustrates what Calgary clients want, how Calgary lawyers deliver it, and how both clients and lawyers perceive the so-called legal heavyweights from Toronto. And, it explains (at least in part) why, despite a Bay Street siege now into its third decade, the top-tier legal market in Calgary still belongs to Calgary-based firms. As John Wilmot, a banking and corporate partner with BD&P, puts it, "You're not going to succeed penetrating the Calgary business community arriving from Toronto with a suitcase full of commas. That's not how it works."
Long seen by many Toronto corporate lawyers as a "hinterland" where they occasionally provided expertise unavailable locally, Calgary is now one of Canada's most hotly contested legal markets. As David Robottom points out, "We not only have the Bay Street firms moving in, but the Vancouver and Regina firms as well. If you add them all up, it's a very competitive marketplace." Robottom is a corporate partner at Stikeman Elliott LLP in Calgary and until recently, chief executive officer (1998-2003) of Fraser Milner Casgrain LLP (FMC).
Through a combination of mergers and greenfields, almost every Canadian law firm of note is now in Calgary. McCarthy Tétrault LLP has been in the market since 1980. Blake, Cassels & Graydon LLP arrived in 1985. Stikeman Elliott in 1992. Osler, Hoskin & Harcourt LLP followed in 1995. Gowling Lafleur Henderson LLP, Borden Ladner Gervais LLP (BLG), Fraser & Beatty and Miller Thomson LLP entered the market in the late 1990s through mergers with, respectively, Code Hunter, Howard Mackie, Milner Fenerty and Cook Duke Cox.
Heenan Blaikie LLP opened a greenfield Calgary office in 2000. Vancouver-based Davis & Company and Lawson Lundell made similar entrances as did Regina-based MacPherson Leslie & Tyerman LLP. Global giant Baker & McKenzie opened a greenfield in 2001. Fasken Martineau DuMoulin LLP, its merger overtures rebuffed, opened a greenfield in 2003.
Everybody, notes Campbell, wants "a piece of the Calgary market." But, 24 years after the dramatic entry of McCarthys (contested by the Law Society of Alberta all the way to the Supreme Court of Canada), the top-tier corporate market continues to be dominated by Bennett Jones LLP, Macleod Dixon LLP and BD&P. Or, in the words of one competitor, "the local triumvirate." And no one in Toronto seems to understand why.
"It's a very, very competitive marketplace," says Michael Black, managing partner of the four-year old Calgary office of Heenan Blaikie LLP. Black and his partners believe their new office is a Calgary success story. According to Black, they have earned "gold stars for profitability" from their partners elsewhere in Canada. Nevertheless, as noted by Rod Ferguson, a BD&P alumni and one of the founding partners of the new office, some of their partners are "getting tired of the following exchange at cocktail parties: 'Where are you now? Heenan Blaikie. Heenan Who?'" But they knew what they were getting into and who they were taking on. "In the Calgary marketplace, Heenan Blaikie is just a name of a law firm," says Black. "We effectively had no presence here."
"It's a daunting task, to go up against them," says Ferguson, referring to Calgary's Big Three. "Nobody's saying they're not highly successful. I think the experience of Bay Street firms in Calgary is a testimony to how well those three firms service the market. And I think that has been underestimated at times. We come from Calgary and we don't underestimate them at all."
The three firms comprising "the local triumvirate" are certainly not cut from the same cloth. At just over one hundred lawyers, BD&P is the smallest and a one-office firm. At about 150 lawyers in Calgary, Macleod Dixon has pursued a unique and aggressive international strategy setting up "frontier offices" in Moscow, Almaty, Caracus and Rio de Janeiro. The firm also has an office in Toronto. Bennett Jones, Calgary's largest law firm with 180 lawyers, has offices in Edmonton and Toronto and positions itself as a national player with an international reputation.
Culturally, the three firms differ, a fact underlined by the almost non-existent exchange of talent between them at the partner level. But they do have a few things in common: more than their fair share of leading lawyers and big deals, a close relationship with the oil and gas sector and a fierce attachment to their independence.
The three firms do not have the market all to themselves, of course. Smaller firms, such as energy boutique Thackray Burgess, provide stiff competition, particularly at the junior end of the oil patch. Most notable among the merged nationals, as it was pre-merger, is FMC's Calgary office, well-respected in most of the practice areas key to the Calgary market, especially oil and gas regulatory matters. BLG is another example of a notable Calgary firm (Howard, Mackie) now backed by a national platform. But, and most of their competitors acknowledge this, however ruefully, nobody else is quite in the same class as the "local triumvirate."
The March 2001 Lexpert cover story on the Calgary independents, ie, Bennett Jones, Macleod Dixon and BD&P, asked, "Will they 'do it'?" Three years later, they still have not. They have been saying "no" so consistently, Bay Street is starting to believe them-to wit, despite its well-documented urge to merge, Fasken Martineau was forced to enter a Calgary greenfield.
None of the independent firms is officially shutting the door on a potential merger but, in the words of Harry Campbell, "that's fraught with issues." Money, of course, is front and centre. All three firms are doing well and there are not many Toronto suitors who can match them on per partner profitability.
Other issues are cultural, as exemplified by some of the growing pains at the merged nationals in Calgary, the 1999 merger that was not between Bennett Jones and Toronto-based Torys LLP, as well as the recent fallout at McCarthys' Calgary office. At the heart of the matter are issues of control and respect. As Jay Park, a senior partner with Macleod Dixon partner, puts it, "Calgary beats its own drum."
The leading firms in Calgary understand what the price of a merger with a major Toronto-based firm (only the Seven Sisters-and not all of them-need apply) would be. Merger "of equals" rhetoric aside, there is a perceived "attitude problem" coupled with a fundamental issue as to who is going to drive the bus.
"You've got some talented, talented people here and a client base that won't accept condescension from anyone," says John Brussa, a senior tax practitioner with BD&P. Neither will the "talented, talented" Calgary lawyers. However, experience taught them that condescension is inevitable when dealing with the Bay Street firms.
Take the example of one top Toronto firm that tried to poach Brussa for its Calgary greenfield. It is no surprise he was on their hit list. Brussa is recognized as one of the top tax practitioners in Canada. He is respected and well connected in the Calgary business community. He was instrumental in putting together the royalty trust structure, which endeared him to many well-heeled clients.
The way the Toronto firm went about recruiting Brussa speaks volumes. They flew him to Toronto to meet the powers that be. So far, so good. And then, "We were introduced, we shook hands, and one of the guys said to me 'Wow, John, you've had a marvellous career. But just imagine how successful you'd have been if you had worked in Toronto.'"
Brussa declined the offer and the Bay Street firm that fumbled his recruitment-take three guesses-is still struggling with the Calgary market. Lesson: do not tell potential laterals they would have had better careers in Toronto. It does not encourage the collegiality of equals.
"But that's the way they think," shrugs Brussa. "There's still a mentality that we're cowboys here and we're not up to the competency levels of the Toronto practitioners. I think what they mistake is style for substance. It's not that the people practising here are not as smart as the Toronto practitioners, it's just that we have a different style of doing it, which has a better fit with our clients."
The style is simply, one might say, Western. "Clients want you to find a way to do the deal," says Douglas Mitchell, Q.C., managing partner of BLG's Calgary office. Adds John Wilmot, "The client doesn't want you creating problems. He wants you to get the deal done as quickly as possible. That doesn't mean we miss stuff." It just means they don't sweat the small stuff. But, notes Brussa, "The Toronto guys, a lot of them see this, the fact that we're not arguing over commas and things like that, as meaning we're not as careful."
Calgary lawyers, and their clients, do deals more quickly and, as a result, take more risks than is the norm on Bay Street. "Clients are making decisions more quickly. We're seeing more quick and dirty deals," says Patrick Burgess of Thackray Burgess.
"The concern is that the marketplace can quickly change, people change their minds, decisions by other people impact on your transactions," explains Andrew Love, a senior corporate partner with Macleod Dixon. Speed comes at a price. Says Brussa, "You don't put 20 people on a deal here to get the deal risk down to 0.1 per cent." Or, as Bill Winters of BD&P, a banking and corporate partner, is fond of saying: "You don't have a lot of people here who take boulders and try to crack them down to talcum powder."
This attitude forms a crucial part of the Calgary business culture. "The concept of risk and calculated risk is embedded in it," says Brussa. "An average well in Alberta is in excess of 2000 metres deep. So you're drilling a mile and a quarter into the earth, in some cases 5 miles, trying to figure out what was down there one hundred million to five hundred million years ago. You can appreciate what the variables would be in that."
Continues Brussa, "So there's an embedded sense that you do your best and you take risks. If you only drilled wells where you had a 90 per cent chance of success, only 15 or 20 per cent of the wells that are drilled would be drilled. That permeates the business culture-actions are based on making the best assessment of your risks and rewards and then putting the drill bit into the ground.
"Drilling an oil and gas well is maybe a 50/50 shot, but if you hit it you make five times or ten times your money. A person in that position will say 'Geez, I can only get my risk down to about 50 per cent, I'll try to get it down to 50 per cent, and then it's in the hands of God.'"
That is how oil and gas companies work. Banks do not think like that and neither do their lawyers. As Brussa sees it, "In Toronto it seems like practising law is a multiple choice exam where you get one point for the right answer and lose 10 for the wrong answer. In Calgary it's sort of like a multiple choice exam where you get a point for the right answer and you're not excessively penalized for a wrong answer, as long as you've done the work. There's a recognition that things don't work sometimes." (See "Understanding Risk" p. 66.)
Toronto firms do not necessarily share this open attitude towards risk, but the Calgary offices of the national law firms, merged or greenfielded, are staffed predominantly, in most cases exclusively, by Calgary lawyers who know how their market thinks. As Jeffrey Geib of Thackray Burgess puts it, "You see different names on top of the letterhead, but very few new people." In other words, it's the same Calgary lawyers running around, they're just wearing different t-shirts.
However, the logo on t-shirts is not helping as much as some of the national firms thought it would. Firms succeed in Calgary, says Geib, by "staffing themselves with people who have the contacts in the Calgary marketplace, not by flashing the name of the firm."
"No one hires you because of your brand name," agrees Pat Finnerty, a top-ranked corporate partner with Blakes in Calgary. When Blakes opened in 1985 it had considerable name recognition in the Calgary legal and financial community because of the Toronto office's historical relationship with CIBC. Lawyers from Blakes in Toronto, says Finnerty, "had been doing work around the CIBC offices in Calgary for years." But, as Finnerty goes on to note, when the firm set up shop in Calgary that association "was not always the biggest blessing in the world." And this included CIBC's Calgary bankers, who already had "a long-standing relationship with Calgary law firms."
Explains Finnerty, "The Calgary people saw Blakes as 'the people who head office sends out here.' So yes, we had name recognition, but it wasn't necessarily at the level 'we better use Blakes because head office uses them.' It was more like, well, 'We know who these clowns are.' That didn't necessarily translate into a strong and immediate client base.
"The brand name helps you get on a list, helps you get a foot in the door, get the phone calls returned," concludes Finnerty. "That is a huge advantage. But, people rarely hire Blakes just because it is Blakes. People hire lawyers because they think those lawyers will help you get a job done." And Calgary clients (such as EnCana Corp., Suncor Energy Inc. and Enerplus Resources Fund to drop a few names) do hire Blakes, consistently, making the firm a solid success story in Calgary.
"Blakes is the best example of a firm from Toronto that has done well in this market," agrees Grant Zawalsky, a corporate partner with BD&P. John Brussa pays the firm an even higher compliment. "If you didn't stop to think about it, you wouldn't even think of Blakes as a Toronto firm. You'd think they were Calgary guys." Which they are. Finnerty is the only remaining Toronto "import" at Blakes in Calgary, and he has been in the market for 18 years. Plus, he is not really from Toronto, he is from the Okanagan.
For Glenn Cameron, managing partner of Stikeman Elliott's Calgary office, his firm's brand name "always helps in a certain sized deal. On the large transactions, clients are only going to hire brand name firms. But is Stikeman Elliott a magic name when you come into Calgary? Where people are saying, 'Oh good, I was hoping they were going to come here?' Not so much."
As Oslers discovered, a strong Toronto brand has an unexpected downside. If you are God in Toronto, everyone pounces on you once you are a mere mortal in Calgary. Oslers is the Bay Street firm most Calgary firms (and other greenfields) love to pick on. After all, it was the firm they feared the most and expected the most from. When Oslers failed to turn the Calgary market inside out in the first, a couple of years, then five, and now, almost a decade, the Calgary firms breathed a collective sigh of relief. The sky was not going to fall down. The Calgary citadel was safe.
Oslers is tired of explaining its slow progress in the Calgary market. As former Calgary office managing partner John Macfarlane, now back in Toronto, has said, "Calgary is a market where market share is gained inch by inch." Current managing partner Tristram Mallett does not even go there. The firm knows the market is tough and is in for the long haul.
Unfortunately, underscoring the "incomplete success" of Oslers in Calgary is the "obvious success" of its new Montreal office, now at more than 50 lawyers, and the notable effect the firm's entry into Montreal has had on a previously static market. When lawyers talk about the firms that "matter" in Calgary, they talk about, in the words of one well-known corporate practitioner, first, "the local triumvirate of Bennett Jones, Macleod Dixon and BD&P, then Blakes, McCarthys, and FMC, to a lesser degree Stikemans, and to an even lesser degree Oslers." That "even lesser degree" hurts, particularly if you are Oslers.
But the firm is not doing as bad as most of the Calgary incumbents would like to think. It has 27 lawyers, which may be small potatoes compared to Bennett Jones or Macleod Dixon, but compares favourably to 33 at Stikeman Elliott. Moreover, Oslers got the choice slot in the corporate battle for Fording Coal, Western Canada's largest and most dramatic deal of 2003. It recently recruited Lorne Carson, one of the energy stars with Bennett Jones. And, the story on the street is that Oslers came close to denuding Bennett Jones of more than Carson. Much more.
Still, there is no denying that the stature of Oslers in Calgary pales in comparison to its stature in Toronto. But then, if one compares the stature of any Toronto-based firm in their home market to their position in Calgary, no one is at the top of the market. "I find it an extremely interesting question as to why the Toronto firms have not been able to break into the top-tier in Calgary, and I would include Blakes and McCarthy Tétrault in that," says Douglas Black, Q.C., FMC's vice-chairman. "If you look at their positions in Toronto, they're nowhere near that in Calgary."
That is just the way it is. Everywhere. Baker & McKenzie may be a global giant, but neither its Toronto nor its Calgary offices are anywhere close to the position of its Chicago or London offices. It works in reverse as well. Macleod Dixon and Bennett Jones have had offices in Toronto for about as long as, respectively, Oslers and Stikes have been in Calgary.
Macleod Dixon, in Toronto since 1994, has been called "Toronto's best kept secret," a market position that allowed it to experience its 2003 Toronto setback (a number of lawyers left) in relative anonymity. Bennett Jones, in Toronto since 1989, has had more makeovers than Madonna (see "Bennett Jones: Rethinking Toronto," Lexpert, March 2004).
BD&P has never taken on Toronto. The lesson BD&P learned from Macleod Dixon and Bennett Jones is that Toronto is just as hard a market to crack for a Calgary powerhouse as Calgary is for a Toronto powerhouse.
"I don't see us going to Toronto and capturing any market. That would be a non-starter for us," says Harry Campbell. BD&P credits its success to a culture that meshes well with junior oil and gas companies and Western entrepreneurs such as WestJet. "If you took our culture and tried to act for Manulife or BCE, it probably wouldn't work. So we're probably not set up to function in that arena and the people who are set up to function in that arena aren't set up to function in this arena. I think we'd be fish out of water there. We see how some people struggle here, because they're not used to the arena here, and we would be in the same boat in Toronto."
Not rocket science, right? But when Bay Street first stormed Calgary it did not think of itself as a newcomer in a well serviced market. As John Brussa points out, "That's the biggest misconception the Toronto firms had, that just because they're from Toronto the Calgary companies would say 'Oh my God, we've been dealing with these triple-A players, and now we have some major leaguers.' That hasn't happened."
Pat Burgess agrees. "The arrival of a new firm in town, whether it's a national firm out of Toronto or an international firm like Baker & McKenzie, isn't an event that gets clients clamouring for the train."
You cannot really blame the Bay Street firms for thinking Calgary would welcome them with open arms. After all, as every Calgary lawyer, including Jack Thrasher, Q.C., will tell you, Calgary is "the ultimate Canadian meritocracy." Thrasher is the senior energy partner with the Calgary office of Oslers. With his Harvard LL.M. and birth certificate from Saskatchewan, Thrasher is one of the many "transplanted" Calgarians who made good in the city. As Tris Mallett, who moved to Calgary from Toronto in 1995 puts it, "Everyone here is a sodbuster in one way or another."
As emphasized by Doug Mitchell of BLG, "It doesn't matter where you come from, you will be treated as an equal." The legal and business community, explains Ron Deyholos, a Blakes partner, is "small but not exclusive." Adds fellow partner Dallas Droppo, Q.C., "I don't think there are barriers to entry for anyone who has the right skill set and personality."
The attitude is the same at every Calgary law firm, indigenous, merged or greenfielded. "In Calgary, you earn your respect. In Calgary, it's not who your family is that matters," says James Pasieka of Heenan Blaikie. "It is instead your own credibility and reputation. You earn your respect just as a business man earns his respect, not from lineage, but from here and now, delivering service and performance."
In a fundamental sense the unimportance of lineage is what defines the Calgary meritocracy. As Allan McLarty, Q.C., of FMC puts it, "There are not many successful presidents and CEOs of corporations in this town who have 'the third' or 'the fourth' after their name. There aren't that many 'seconds' either. A large chunk of people here are self-made."
"Clients are much less institutionalized here," agrees Rod Ferguson of Heenan Blaikie. "It's not that the law firm of choice is XYZ, we've used them for 50 years, and will continue to use them. It's much more a meritocracy. People start new businesses and they're open to new and different law firms." But if that's true, why does "the local triumvirate" have such a dominant position in the marketplace?
"We're good lawyers," says William Rice, national managing partner of Bennett Jones. "I don't think we have a secret formula. We have worked very hard at having excellent lawyers delivering excellent service. We have not been complacent about our position, and quite frankly, we have had some good fortune in respect of the clients we have acted for."
With no little exasperation (he is tired of dealing with this allegation), Rice points out that firm counsel and former Alberta premier, Peter Lougheed, Q.C., "is not on every board, and he doesn't really influence to a grand degree the quantity of work that goes in and out of this firm. We have as many people from different parts of the country as every other firm in the city does. We have people who have grown up in Calgary and have long time contacts in the community, but for the most part, the people in this firm have built up their contacts the way everyone does. Of course, we come with an established name, but there are other established names around the city."
One of these "other established names" belongs to Fraser Milner Casgrain. FMC's senior litigator and "statesman" David Tavender, Q.C., sees the secret of the incumbents' success as blindingly obvious. "Clients don't leave, except for a reason. Good firms that continue to grow, bring in talent and are well managed, will maintain their client base." That, he says, is why "our firm and some of the other long-established Calgary firms continue to thrive."
Rice adds, "I don't in any way think the Toronto firms have been at a disadvantage because they haven't been seen as Calgary firms." Pat Finnerty, who spent the first years of his career with Blakes in Toronto before coming to Calgary, agrees. "Coming out here, I don't recall any particular difficulty from the legal community in being accepted. I never personally had any sense that people rejected us on the basis that we were carpetbaggers from the East. It clearly took some time to establish our credentials in the business community, but it wasn't for lack of acceptance. It was the same as it would be for anybody establishing a new business."
However, from the outside looking in, Calgary's meritocracy looks kind of...incestuous. True, there are no client relationships that go back for generations because although the Calgary law firms have histories of one hundred years or so, many corporate clients have relatively short life spans (see "Understanding Risk", p. 66 and 68). But clients and lawyers are bound up together in a loyalty of another sort.
"A lot of our clients are our friends," says Michael Black. Partner Mitchell Shier elaborates. "You're going away from closings where people you know and have known for a long time have literally won the lottery. I leave closings where I'm literally walking on air."
This adds another dimension to the solicitor/client relationship. Clients may be less institutionalized than in Toronto, but they are invariably loyal to the lawyers who helped them drill their first well, buy their first assets, or make their first million. Says FMC partner William Jenkins, "The relationships that are more important here are the people who worked together in the early years of their career." BD&P grew into a major energy law firm because a good chunk of its "little guy" clients became intermediates and then majors. But the firm has never abandoned the juniors. In Calgary, even Bennett Jones and Macleod Dixon court the small fry. In contrast, most Bay Street firms focus on the "majors" and institutional clients, and in Calgary, they do so at their peril.
As Brussa explains, when the Toronto "assault" started with Black & Co. (the predecessor firm to McCarthy Tétrault), "there may have been a perception the Calgary firms wouldn't be able to compete, because all the work is really generated within five blocks of King and Bay. And if the Toronto firms are here, they're going to marginalize all the Calgary firms."
Even the Calgary powerhouses believed it-or at least worried about it. The Bay Street firms were already flying people to Calgary to do financings. They were already set up to do the kind of sophisticated work the Calgary firms were just getting their teeth into. (Twenty years later, some senior Calgary lawyers still resent the fly-overs.)
In 2004, with the "assault" into its third decade, two things are clear. First, the Calgary firms leveraged their home ice advantage to the full and ramped up in size and sophistication at a faster rate than anticipated. They are not afraid of Toronto anymore. Second, Toronto still really wants Calgary. As Mallett at Oslers sees it, "This market clearly makes sense for a national firm to be in. It's a market we as a firm have to be in, because it's one of the two or three major markets in this country."
The 2003 greenfield entry of Fasken Martineau illustrates just how important the Calgary market is to Toronto-so important that a firm that clearly prefers to grow by merger is willing to assume the risk of a Calgary greenfield. Strip away the "seamless service" and "one-stop shopping" rhetoric of national firms and, says Bill Winters of BD&P, it is obvious Toronto firms want to be in Calgary for all the usual reasons, namely: "the possibility of employing lawyers and taking revenue out of the pockets of clients."
And one more. Fear. "The Toronto firms are scared to death bank mergers are going to happen and the financial centre of gravity in Canada will shift to New York. They're already seeing fly-overs." Brussa goes on to add that globalization, which transformed Calgary to a world-class energy centre, threatens to marginalize Toronto. "Toronto doesn't necessarily get the same benefit from globalization as a place like Calgary does because Calgary is a global energy centre. Toronto is Canada's financial centre but it's not a world financial centre like New York. Come global consolidation financial services and Toronto risks becoming Cleveland."
Ouch! The last time Brussa made an observation like that in public, he almost got into a fist fight with a Torontonian. But it is an argument that must be addressed. When the Toronto-based majors looked for Calgary mergers, what held "the local triumvirate" back was an absence of added value. The driver behind the merger talks between Bennett Jones and Torys (the two top-tier firms have come close to doing a deal) illustrates the point. Each was interested in the other as part of a triangle that included New York. It is no secret in Calgary that the possibility of a New York/Toronto/Calgary triangle with a top-tier firm in Calgary participating had the other Calgary firms, as one corporate partner at a triumvirate firm indelicately put it, "fouling their pants."
"In our pond, which is basically energy, the axis is not East/West, it's North/South," says Brussa. "The whole East/West concept is a bit forced," says Robert Rooney, a partner with Bennett Jones, who practises almost exclusively in the international energy arena. "The Toronto/Calgary corridor is virtually non-existent. The corridor is primarily Calgary/Houston. The natural flow of business is North/South. The same is true in Central and Eastern Canada. Toronto looks to New York. It's where the money is."
Calgary's international stature in the oil and gas sector coupled with the global reach of that sector, and by extension energy law firms, is perhaps the most important reason Toronto majors want to be in Calgary. As argued by Doug Black of FMC, between the globalization of business and massive consolidation within the legal profession by way of national mergers, more firms are thinking about "the next move"-going beyond the national law firm. Tomorrow's pond may be neither regional nor national but global, or at least continental.
Calgary lawyers do spend more time musing about continental or international alliances than domestic. But, as the renewed "assault" of Bennett Jones on the Toronto market illustrates, Toronto is not irrelevant. Yet. And when it comes to tapping capital pools, the importance of Toronto vis-Ã -vis, US centres seems to be, like so much else in Calgary, a cyclical thing. As Jay Park at Macleod Dixon points out, when US ownership of the Alberta oil and gas sector increases, the US head offices frequently bypass Toronto capital markets. But when they sell out to the Canadian interests, the Canadian-controlled companies turn to Toronto.
"You cannot overlook Toronto," agrees Mark Smith, an energy partner with Oslers. "New York is clearly the destination for significant capital in the industry, but Toronto is important from a Canadian securities standpoint as well."
For the moment, however, the Calgary-based independents are firmly of the view that Calgary is more important to Toronto than Toronto is to Calgary. "Theoretically, all the national law firm mergers were seen as reciprocal arrangements," says Al McLarty of FMC. "For Toronto, this is a very good business community to be in. They wanted to be part of the action and to have that opportunity. From Calgary's perspective, the objective driving getting into a national firm would generally have been to get closer to the financial community in Toronto."
Theoretically? What about the nuts and bolts of the real world? The short answer? When asked about his new Toronto partners and "who first asked who to dance," a senior Calgary corporate lawyer smiles and replies, "They wanted us more." This imbalance provides the answer in explaining the reluctance of the leading Calgary independents to merge with Toronto-based majors, as well as their unfocused approach to penetrating the Toronto market itself. Notwithstanding the competitive Calgary market, they still have it pretty good.
"If you're here as an independent firm, you've got lots to do here," says Jack Thrasher of Oslers. "There aren't as many drivers to make firms look to other markets." But if you are a Toronto-based major looking to the future, there are a lot of reasons to want a significant presence in Calgary. Just remember, when you pack, go easy on the commas.
Marzena Czarnecka is a Calgary-based Lexpert staff writer.
Side Bar #1 : Understanding Risk
Ask any Calgary lawyer what makes the Calgary market unique and he or she will shoot back with the "e" word. No, not energy (that is a given). "It's a very entrepreneurial city," says Andrew Love of Macleod Dixon. Yeah, we know. It is in the first sentence of all your brochures. But, platitudes aside, what does "entrepreneurial" really mean?
Three things. First, an entrepreneurial city equals entrepreneurial clients equals a lot of work. "Clients want to do things all the time," says Love. "There's a lot of wheeling and dealing, a lot of deals getting done."
Second, entrepreneurial clients are attracted to entrepreneurial lawyers. As Pat Burgess of Thackray Burgess points out, "Our clients are entrepreneurial. They make things happen. They are successful because they have ideas and they make things happen. This firm came together because we think like our clients."
BD&P explains its success in similar terms. As John Brussa notes, "We've done very well here. One of the reasons we've done well is we're kind of like our clients. Our attitude towards business is the same as our clients' attitude towards business."
Finally, an entrepreneurial client in the oil and gas business might be your top biller one year and might be gone tomorrow. As Doug Mitchell of BLG emphasizes, "You do not want to become too dependent on one client, or a couple of clients." David Field of Faskens offers the following advice: "Practise as if the client you have today won't be there tomorrow." That is the nature of the energy business and it makes resting on your laurels difficult-even if you are a dominant player in the city.
"All of the firms here would have seen very major clients come and go, and almost every lawyer would have found the need to rebuild their practice two or three times over the course of a career," notes Bill Rice of Bennett Jones. Most of the clients disappear through mergers and acquisitions. "It's Pac Man," laughs Brussa. "Sometimes a file comes to you, and you look at it, and you say, yeah, I structured this transaction, but that was five mergers ago-what the hell was I thinking?"
The oil patch "Pac Man" gives rise to a different kind of relationship with clients. Corporate clients have shorter and shorter life spans-down to two or three years during this cycle-but, as David Spencer of FMC puts it, "Your rolodex of clients is always changing, but the people you are dealing with through your career is more stable." Lorne Carson of Oslers points to the examples of Dome Petroleum and Canadian Airlines. The companies are no more (illustrating that it's not just at the junior end of the oil patch that companies disappear). But, says Carson, "There were some very talented people at each of those companies. A lot of lawyers worked with them and built strong relationships with them, and they continue to work with them in their new ventures."
Business development in Calgary entails keeping close track of where the key people at your former clients go. Add to this a further important point. There is a constant stream of newcomers into the market. As Rice points out, "You had better be prepared to make new friends and develop new relationships." Couple this with the inevitable ups and downs of Calgary's cyclical market and, as Rice says, "Maybe we're entrepreneurial because we have to be."
Maybe. Burgess comes closer to the mark when he notes that "If you're the kind of lawyer who needs to have Royal Bank as a client and guaranteed x hours of work a week and a steady paycheque, then obviously you're not entrepreneurial and you're not going to do well."
But it is John Brussa who goes to the heart of the matter. "Look, law is generally a risk adverse profession. But in this town you have to embrace risk. You have to enjoy risk. I'm not talking about blind risk. I'm talking calculated risk. It's what drives our clients. It permeates everything."
Side Bar #2 :Shake Up in Calgary
"For years and years, partners just didn't leave Bennett Jones to go elsewhere," says Len Sali, a prominent litigation partner with the firm. Sali is himself a lateral, crossing over from the Calgary predecessor of FMC in the early 1990s. "Because of the changing times, you do see more of that today than before. If you want to develop credibility in the market as a greenfield operation, you have to go into one of the major law firms and recruit their prominent partners. That's the reality today."
It wasn't that long ago that Bennett Jones could boast it had never lost a partner to another law firm. It can't say that anymore. Lorne Carson's move to Oslers, in conjunction with the recent move of FMC's former Calgary-based CEO David Robottom to Stikeman Elliott, suggest a change coming in the Calgary market.
"Partners at the established firms are starting to see the greenfields as a viable career option," says one lawyer with a Calgary greenfield office. "They've seen colleagues go there and the people who moved haven't fallen off the face of the earth."
But there's something a little different about Carson's and Robottom's moves. It's no secret that Toronto-based Oslers has been trying to poach Bennett Jones stars since it arrived in Calgary, for the most part unsuccessfully. A number of Bennett Jones associates crossed in the early days of the greenfield, but most were back at Bennett Jones within a year. Getting Carson, no matter how you slice it, was a win and perceived as such by the market.
"Cherry picking" in Calgary is tough, especially from the top-tier. Lawyers know that while changing firms doesn't carry quite the same stigma it did a decade ago, going downmarket is a career-killer. And, let's face it, most of the partners at the leading Calgary firms were of the mind that a move to Stikes, Oslers, and even Blakes or McCarthys (never mind all those other guys) was, well, beneath them.
That perception isn't altogether history, but it's fading. Speaking off the record, one partner with a Calgary independent notes he and his peers increasingly see crossing over to a firm like Stikeman Elliott or Oslers as a viable career move "under certain conditions" (=$). And, if such moves become more common, and if clients really choose lawyers not law firms, the Calgary market could get a long overdue upheaval.