Canadian Lawyer

January 2019

The most widely read magazine for Canadian lawyers

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16 J A N U A R Y 2 0 1 9 w w w . c a n a d i a n l a w y e r m a g . c o m W hen it comes to examining the business of law, the media often places too much emphasis and focus on Big Law and metrics that apply more to Bay Street or Wall Street than main street. Things such as profits per partner, revenue per lawyer, cost associate-partner ratios, the share of merger and acquisi- tion transactions and big-ticket litigation or deals drive coverage. It's law firm braggadocio, sometimes on a Trumpian scale, and I've certainly been guilty of fostering it over the years. After all, it's sexy talking about big numbers or, better yet, law firm blowups. Come on, admit it, we all read about Heenan Blaikie and were engaged in its untimely demise; same for Goodman Carr. Even troubles at foreign firms such as Dewey & LeBoeuf LLP, Dreier LLP and Coudert Brothers LLP garnered Canadian coverage. In many instances, lawyers devour such information with the view of "There but for the grace of God go I." However, Big Law is only a small part of the legal industry equation, albeit a sub- stantial one in terms of billings. F O L L O W T H E M O N E Y TAKING ON BIG LAW By Jim Middlemiss Lawyers at smaller firms and solos are competing in the big leagues The reality is that most lawyers work at firms of 10 or fewer lawyers, according to 2016 sta- tistics on law firms from the Federation of Law Societies of Canada. Sole practitioners dominate the landscape, followed by firms with two to 10 lawyers. Firms with more than 50 lawyers are few and far between in comparison. Simply put, small and sole practitioners make up the heart of the regulated profession, and they will tell you that heart is beating strongly. Take Mike Seto. He started a "virtual law firm" focusing on small businesses a few years ago and today he is "as busy as heck. I am focus- ing exclusively on corporate commercial," he explains. That includes helping companies with succession planning. "A virtual firm is a great way to contain costs." The sole and small practitioner has been a mainstay to law since Roman emperor Claudius, who ruled from 10 BC to 54 AD, relaxed prohibi- tions on advocates being compensated, making it one of the world's oldest professions. Today, there seems to be a renaissance in small firm practice. "There are more small bou- tiques opening up, particularly in the litigation world, which is where I practise," says Kathryn Manning of DMG Advocates LLP in Toronto, a six-lawyer firm. She notes that "big firms" are expensive, and that makes it challenging for litigators who are starting out their careers to bring in a steady array of business and build a book of clients. Billing rates are high and can only support bet-the-farm types of litigation, she says. In fact, people spinning out of large law firms — or what Michele Ballagh of Hamilton intellectual property boutique Ballagh + Edward LLP calls "Big Law refugees" — are behind some of the resurgence in small firm practice. "Me and my partner are what we call Big Law refugees. We found each other after we left big law firms," Ballagh says. "Big firms are a very, very good training ground," Ballagh says. But she admits that, "I could have probably come out earlier. Lawyers don't jump off on their own very easily." Ballagh says she was "surprised" at how cheap the technology was that they needed to run their firm. The technology is evolving, she says, and it's much more cost-efficient. "I don't find that there is very much I can't do that I used to do at Gowl- ings," her former firm, she says. At a time when Big Law's growth is stagnant, small firms continue to hold their own. Take @JimMiddlemiss O P I N I O N MATTHEW BILLINGTON

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