Listening to Roy Heenan give his spin on the demise of his law firm, I couldn’t help but hear the strains of Elton John’s “Funeral for a Friend” in my head.
It will be some time before the full back story of this debacle will be known. But in my view, Heenan Blaikie died from a combination of greed, poor management and failed leadership wrapped together in an antiquated business structure ill-suited to “more for less” client demands in a marketplace gradually filling with non-traditional competitors.
As I have said repeatedly, the Canadian legal profession is now entering the most disruptive period of time in its history. It has never faced such strong client demands for value and efficiency. It has never faced competition from non-traditional legal providers.
These are structural changes that never go away; they amplify.
And all of this in an environment of flat legal services demand, over capacity and legal tech entrepreneurs!
Layer in partners who are more loyal to themselves than to the firm and one can see that Heenan Blaikie (like every other law firm in Canada) was a house built on sand, not bedrock.
And all HB’s famous names could not stop the shifting sands.
For those who still naively believe that law is a profession (not a business) where clients come ahead of personal monetary gain, HB clearly shows the opposite.
Where were the clients in this mess?
If Roy Heenan is correct, the partners who bolted for the lifeboats, viewed clients as nothing more than portable commodities to be flaunted in front of other law firms for the sole purpose of obtaining the maximum annual draw. Such a noble profession……
And what of the support staff? Did anyone care a whit for them?
Where do they land? Or are they left out in the cold? The media and all the outpouring of sadness from the profession has focussed on the lawyers and students – not the unsung heroes of every firm, the support teams without whom law firms could not operate. The lowest paid on the law firm payroll who would kill for the salaries demanded by junior lawyers. They are the true victims of this carnage.
Sadly, Heenan Blaikie is not an anomaly. Others will follow in its footsteps over the next 18 – 24 months. The UK and US began their journey through legal services disruption 5 years ago, Canada is just late to the party.
One would hope that those lawyers from HB who will form new firms will take the opportunity to start from a blank page, free from the constraints of legacy and other problems of the old firm.
I hope that they create a unique structure and offer unique client experiences which cannot be replicated at other firms.
I hope that they will realize that the days of claiming that only lawyers are capable of running law firms are over. That the days of having a managing partner who must still maintain a practice while managing the firm is over. And the days of using hours billed and client credit as the only metrics for bonuses and promotion are over.
I hope that they work within a corporate structure with an independent board of directors and professional management teams that make all strategic decisions – leaving the lawyers to do only what they do best, practice law.
I hope that they will be employee shareholders with a fixed salary and bonuses based on a balanced scorecard of meeting personal goals and the firm meeting its corporate goals – hours churned out will no longer be seen as a legitimate metric.
My fear however is that the new firms that spring up will just be mini-HBs with lower over-head costs – and the cycle of growth to destruction will begin anew.