Canadian Lawyer

"I think the best way to characterize it is I was looking forward to try and identify what I thought the best platform would be for my practice over the next 15 years or so." Henry Dinsdale, Hicks Morley In the case of the Heenan moves, at least one was partially rooted in a more personal history. Dinsdale and Shamie have known each other since law school. "We're friends as well as neighbours," says Shamie. "We have a lot of the same beliefs and client service ideals in terms of how we want to serve our clients and it was just a great fit." But for Dinsdale it was also a strategic move after realizing he no longer felt the big firm environment was right for him. "There were aspects of the internationalization of the firm that didn't fit with how I saw the future unfolding," says Dinsdale. "I think the best way to characterize it is I was looking forward to try and identify what I thought the best platform would be for my practice over the next 15 years or so. I don't make these kinds of moves often. I was at Heenan for 21 years and knew if I wasn't going to be making a move soon — I'm 50 — it becomes increasingly difficult to do so, so it was a time in life to reflect on where I was and how that firm was developing and what was the best platform for me going forward." Unlike some of the top-tier firms that suffered financially over the last five years, Shamie says Hicks Morley has had its best years since 2008, partially due to the need for companies to restructure and the resulting terminations requiring legal services his firm provides. Shamie says he fields calls from a lot of partners looking to make a change these days. "There have been some major changes in the global setting with a number of the full-service firms," says Shamie. "We see that as an opportunity for a boutique firm like ours where we are a true specialty firm." Deciding to leave K owalski says lawyers typically decide to leave their firm for one of two reasons: money or con- cerns about law firm governance issues. In the case of Dentons, conflict and issues around referral work came to the surface immediately, says Christopher Sweeney, CEO of legal recruiter ZSA. "It was a big loss, there's no getting around that. I can't say I was stunned to hear it but I think the scale of it surprised me. It's rare that there are such large deals like that." To date, there haven't been any substantial departures as a result of the recent Norton Rose merger with U.S.based Fulbright Jaworski LLP, but there are some who say it's a definite possibility as questions are raised about what work will now dry up and how practice areas will be affected. If partner pay envelopes get lean, they may start looking. "There have been ones and twos leaving Norton Rose but no big hit yet," says Sweeney. "There is certainly talk something is going to break." Still, other observers see it all as being no different than previous instances where lawyers left because of conflicts in their existing firms such the four partners from McCarthy Tétrault LLP who exited in 1992 to form Lenczner Slaght Royce Smith Griffin LLP. "They left because of the conflicts in the litigation group," says Karen Mackay, president of Phoenix Legal. "A number of people also left Goodman and Carr LLP in 2007 to go to Fraser Milner. They didn't go as a group but there was a number of conversations. I think the street loves to draw conclusions that if people leave one firm it must be bad and if they go to another one it must be good. I think it's just different." There are critics like Kowalski who say the law firm model is broken but Mackay maintains the model is just changing. However, others like Sweeney insist the top-tier firms are hurting financially and that is causing uneasiness among the lawyers, prompting the phones to ring a lot more at legal recruiters. "There are many law firms out there not doing that well — they are either just making target or missing target. The workflow continues to be very choppy," he says. Rate pressures in the bigger firms also prompt some lawyers to look elsewhere if they find themselves part of a bigger, global firm. With a smaller firm they can find more flexibility on rates, says Lawrence Mullman of international legal recruiter Major Lindsey & Africa. "Otherwise, with a bigger firm they may lose clients over time because real estate and labour [and] employment clients are just never going to pay the rates of the new, bigger firm." Adding to all of these factors is a relentlessly sluggish economy, combined with continued pressure on the firms to bow to the demands of a client base with more options for legal services and in-house counsel clients with shrinking budgets. It's enough to make lawyers antsy about their future. "In my estimation we're in year five of the legal recession. There's so many varying signals out there — you have the Dow Jones breaking record territory but at the same time nobody is doing any deals," says Sweeney. He says the canary in the coal mine is the two-to-five year corporate commercial associate — meaning when there's demand for such a creature the economy is humming. "There is no demand for that and there hasn't been for years," he says. "It's a really tough time out there. It's tougher than I've ever seen it except for the period around the Lehman Brothers collapse." With equity positions as a percentage of law firm partnerships on the decline it's causing some to consider their longterm place in the law firm ecosystem. "The problem with so many of the big firms is if you're at year eight and being told partner is not going to happen here and you want to cross the street to another big firm, you tend to have no practice of your own or not much of a practice — it's mainly institutional clients," says Sweeney. An eight-year associate making www.CANADIAN L a w ye r m a g . c o m M ay 2013 31

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