Following up on Omar’s recent post on an impending announcement from Heenan Blaikie regarding its future, the firm announced last night that it was winding up operations. This announcement has sent sent proverbial shockwaves through the legal community. It’s also made front-page headlines in many major newspaper across the country - something I haven’t seen before.
The Globe & Mail released an article last night and followed up with print articles this morning:
The firm said in a release late on Wednesday that an “orderly wind-up” will span several months and make it possible to “ensure a harmonious transfer” of clients to other firms. The partners also agreed on Wednesday to create a five-person committee to oversee the liquidation.
From the National Post & Gazette articles cited above:
… [A] few weeks ago, firm management told partners that income per partner had dropped about 10% to 15%. This sparked a “run on the bank” of legal talent, as more than 30 senior partners moved to other more profitable firms, taking their clients with them. Those familiar with Heenan Blaikie’s financial situation insist the firm is far from broke. It just hasn’t been able to absorb the rapid rate of partner and client departure.
The Toronto Star spoke to more general reasons, while also citing the above exoduses:
The pace of corporate deal-making in Canada’s oilpatch slowed considerably last year, while activity in other sectors failed to make up for the shortfall. That made 2013 the slowest year for mergers and acquisitions since 2009, according to industry statistics compiled by consulting firm PwC. The slowdown hurts law firms that typically earn big fees by advising on those deals.
Many of us (both readers and writers) have strong connections to Heenan and this is very sad day for the legal community. While I’m sure that partners with medium-large books of business will land on their feet, I’m more concerned for the associates, articling students and administrative staff who may have a much harder time finding employment.
Going back to Omar’s article, is Heenan Blaikie the “canary in the coal mine” or is just an isolated incident? Will the firms that have “tied-up” in national / international mergers fair better?