Thursday Thinkpiece: Dodek on the Death of Legal Icon Heenan Blaikie

Each Thursday we present a significant excerpt, usually from a recently published book or journal article. In every case the proper permissions have been obtained. If you are a publisher who would like to participate in this feature, please let us know via the site’s contact form.

CANADA: DEATH OF A LEGAL ICON, DAWN OF CHANGE?
Adam Dodek*
Legal Ethics, Vol 17, No. 1, June 2014, pp. 135-137

Excerpt: pp.135-136

When the end came for the storied national law firm of Heenan Blaikie, it came abruptly. On 5 February 2014, the firm issued an understated three-paragraph Press Release that tersely announced that its partners ‘have decided to proceed with an orderly wind-up of the Firm’s operations’.(1) The announcement came after a frenetic week with failed talks of restructuring, a proposed merger with DLA Piper and lawyers fleeing the firm. Such a thing simply had never happened before in the history of the Canadian legal profession. Yes, respected local firms like Goodman & Carr (Toronto) and Freeman and Company (Vancouver) had perished before, but never a national firm like Heenan Blaikie.

Heenan Blaikie was an iconic Canadian law firm. In many ways, it represented the Canadian ideal: bilingual and national with pretensions of an international presence. Founded in 1973 in Montreal (2), it quickly established itself as one of the top law firms in Canada, although it was never able to break in to the inner echelon of the ‘Seven Sisters’, the premier Toronto-based law firms that hold the lion’s share of coveted corporate work in Canada. However, Heenan Blaikie (often simply referred to as ‘Heenan’ or ‘Heenans’) was home to former Prime Ministers, a former Quebec Premier and retired judges of the highest courts including the Supreme Court of Canada.

Near its peak, Heenan was the sixth largest law firm in Canada with over 500 lawyers in eight Canadian cities as well as an office in Paris (3). It started to experience problems in 2012 with some partners leaving in dribs and drabs, but the collapse of the firm appears to be have been triggered by the announcement in early 2014 that income per partner had dropped by approximately 10 to 15 per cent. This reportedly sparked a ‘run on the bank’ as more than 30 senior partners cashed in their partnership equity and moved to other law firms with their clients (4). As one former Heenan partner so aptly put it, ‘The issue isn’t that Heenan was not profitable; the issue seems to be that it was not profitable enough for some … And that’s crazy.’ (5)

In this sense, the demise of Heenan Blaikie could be characterised as a tale of greed and of the death of law firm loyalty, both of lawyers to each other and of clients to the firm. In the clash between law as a profession and law as business, does the death of Heenan Blaikie show that the idea of law as a profession is simply an anachronism from an age long past? Perhaps. But the acts of certain Heenan lawyers in the dying days show that it is not that easy. By all accounts, while many partners took an ‘every man for himself ’ approach, some firm leaders like Kip Daechsel and Norm Bacal were desperately working to save the firm. They and others stayed behind to ensure an ‘orderly wind-up’ of operations which translated into ensuring that clients, lawyers and staff were dealt with properly. And here too the story is of varied shades of grey. The Toronto office ensured that all current articling students and those scheduled to start articling in the summer found work at other law firms. It is rumoured that partners at some other Heenan offices showed less concern for students. And there were grumblings among staff, suddenly out of their jobs. (6)

Ultimately the answer as to why Heenan collapsed is complicated. There are so many different explanations and potentially multiple contributing causal factors: the inability of a mid-tier large firm to compete in the Canadian legal market; the failure of the partnership model (7); a clash of cultures between the Toronto and Montreal offices (8); a failure in succession planning (9), etc. In a bizarre turn, one commentator blamed law schools for Heenan’s fall, apparently on the theory that the market cannot absorb the number of Canadian legal graduates. (10)

References:

* Vice Dean Research and Associate Professor, Faculty of Law, University of Ottawa, Canada (Common Law Section). Thanks to Malcolm Mercer and Alice Woolley for reading an earlier draft of this commentary and providing helpful comments. All websites accessed April 2014.

1 Heenan Blaikie, ‘Press Release: Heenan Blaikie to Proceed with Orderly Wind-Up of its Operations’ (5 February 2014), www.heenanblaikie.com/en/ImageLibrary/Press-Release.pdf.
2 http://en.wikipedia.org/wiki/Heenan_Blaikie.
3 http://en.wikipedia.org/wiki/Heenan_Blaikie.
4 Matthew Robinson, ‘New Vancouver Law Firm Rises from Ashes of Heenan Blaikie’ Vancouver Sun, 5 February 2014, www.vancouversun.com/Vancouver+firm+rises+from+ashes+Heenan+Blaikie/9474264/story.html.
5 Jeff Gray and Sophie Cousineau, ‘Death of a Law Firm: Behind the Collapse of Heenan Blaikie’ Globe and Mail, 7 February 2014, www.theglobeandmail.com/report-on-business/industry-news/the-law-page/heenanblaikie-death-of-a-law-firm/article16759901/?page=all.
6 Madhavi Acharya-Tom Yew, ‘Heenan Blaikie Closes its Doors’ Toronto Star, 27 February 2014, www.thestar.com/business/2014/02/27/heenan_blaikie_closes_its_doors.html.
7 Ian Holloway, ‘Heenan Blaikie Reveals the Flaw of the Partnership Model’ National Post, 11 February 2014, http://business.financialpost.com/2014/02/11/ian-holloway-heenan-blaikie-reveals-flaw-of-the-partnershipmodel.
8 Allison Lampert, ‘Rivalries Killed Heenan Blaikie, Co-Founder Says’ Montreal Gazette, 7 February 2014, www.montrealgazette.com/business/Rivalries+killed+Heenan+Blaikie+founder+says/9477014/story.html; Theresa Tedesco and Brian Hutchinson, ‘How Heenan Blaikie’s Stunning Collapse Started with a Rogue African Arms Deal’ National Post, 14 February 2014, http://news.nationalpost.com/2014/02/14/how-heenan-blaikies-stunning-collapse-started-with-a-rogue-african-arms-deal.
9 Arshy Mann, ‘Why Canadian Law Firm Heenan Blaikie Foundered and Ultimately Died’ Canadian Business, 25 February 2014, www.canadianbusiness.com/companies-and-industries/the-ode-heenan-blaikie-1973-2014-3.
10 Danielle Olofsson, ‘The lawyer “bulle”’ Canadian Lawyer, 17 February 2014, www.canadianlawyermag.com/5009/The-lawyer-bulle.html.