Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J u l y 2 0 1 4 29 Insiders say the animosity between the two was noticeable. Bonhomme's blunt approach rubbed some partners the wrong way and he is said to have ignored his co-managing partner. Others felt Daechsel was ineffective at reining in Bonhomme, which cost Daechsel credibility with partners. At the same time, there was a void in the chairman's seat. The executive committee did not replace Roy Heenan. It wasn't like the firm lacked candidates, notes Heenan, rattling off the names of former Quebec premier Pierre- Marc Johnson; former Supreme Court of Canada justice Michel Bastarache; Marcel Aubut, president of the Canadian Olympic Committee; Bernard Amyot, past-president of the Canadian Bar Association; labour lawyers Doug Gilbert and Peter Gall; energy lawyer Jim Pasieka; or even Bacal as possible successors. "I never thought it would be difficult to get somebody to succeed me. We had some very prominent and capable people, but we could never get the executive com- mittee to make that decision. They couldn't arrive at a consensus because Montreal and Toronto were squabbling," says Heenan. "Once you start pointing fingers, or competing internally, which is one of the serious problems in any law firm, it's disastrous for a firm. That's poison that eventually, I think, led to the final disaster." He saw the chairman as a critical role, especially given the dynamic emerging between the co-managing partners. "As chair- man, obviously when my two managing partners were having disagreements, I would get called in and we'd settle a matter. But in the absence of the chairman, who does that? That's one of the fundamental flaws." Lawyers also say the drive to cut costs created an environment of fear and panic internally. Heenan had been known as a collegial firm and a fun place to practise, but that was quickly changing. 'Cumbersome' management structure M anagement inertia was also setting in. The firm's gover- nance model included two committees: the executive committee, which effectively operated as a board, and the national managing committee, which focused on operational issues. Gall says the dual committee and co-managing structure was "too cumbersome. It didn't lend itself to effective leadership or decision-making." He also questions the viability of term limits for firm manage- ment. "You want your strongest and best leaders in those positions at all times. It's not some democracy where everyone is going to be a leader. It doesn't work. It's a business organization." The executive committee struggled to come up with a stra- tegic plan throughout 2013, which lawyers say compounded the infighting. Some lawyers felt a strategic plan would provide the feuding co-managing partners with a road map, but a plan never emerged. In the summer, two meetings were called between key Montreal and Toronto partners to clear the air and get everybody rowing in the same direction. However, the situation didn't improve. Canadian Lawyer contacted Daechsel in early November about the growing departures. In a written statement Daechsel, acknowl- edged "2013 has been the most challenging year in many decades for our profession. I can assure you that our firm is on a very solid financial footing. We met budget last year [2012] and, depending on the results of the last quarter of this year [2013], historically our strongest quarter, we are optimistic that we will meet this year's targets (which have been adjusted to reflect departures and additions)." Shortly after, the executive commit- tee sidelined him and Bacal stepped in. Despite the malaise, Heenan remained profitable with 2013 revenues of $222 mil- lion and $75 million in profit, according to the Financial Post. December 2013 billings hit $35 million, the highest ever. Firm profits low W hile tantalizing, the reality is that for a firm with 244 part- ners, according to Chambers Global 2014, that amounts to profits per partner of $307,000, which is "chump change for Bay Street, big firm standards," says management consultant McKenna. The $75 million in profit "sounds good in principle, but once you start digging, the num- bers aren't there." He adds that's a gross profit margin of 33 per cent, which is low for a law firm. "They are not operating on the best margins." Spread out over nine offices, "you can just see the finger pointing that was probably going on." The bleeding of lawyers continued into January 2014, when the daily media picked up on the departures. The ranks were quickly thinning. One lawyer estimated the firm had lost more than 100 fee billers in the span of just over a year. However, it still had fixed costs and excess space in Toronto. Another lawyer said the cuts weren't properly aligned with a reduction in space. Other offices were moving or undergoing renovations, increasing costs. The firm also revealed income per partner was down 15 per cent. In late December 2013 and early January this year, there were key resignations in Montreal. Eric Levy and Manon Thivierge, both considered "lifers" at the firm, decamped for Osler Hoskin & Harcourt LLP. Marie-Josée Hogue, who spent almost 27 years at Heenan, also resigned, moving to McCarthys. It rattled part- ners because they were seen as long-standing lawyers at the firm, and for some observers it spelled the end. On Jan. 13, when Bonhomme resigned, and in what was described by respected Quebec legal blog Droit-Inc. as an internal memo, he dropped the 'D' word bombshell — dissolution — as being the route forward, which some lawyers felt was unnecessary. What started as overcast skies in the beginning of 2013 had now grown into a full-blown frankenstorm. The run on the talent bank was now in full force. Recruiters and competing law firms that had been hammering at lawyers for months were now prying lawyers away, including some who held positions on various man- agement committees at the firm. "No one wanted to take the lead to fix it. Everybody was working on their plan B as I could see it," "No one wanted to take the lead to fix it. Everybody was working on their plan B as I could see it." — Guy Tremblay 2014-15 ALBERTA LEGAL TELEPHONE DIRECTORY THE RIGHT CONNECTIONS MADE EASY Alberta Legal Telephone Directory is all about your legal community connecting you to the lawyers and law offices you need in Alberta, Northwest Territories, Nunavut and Yukon. Published annually for over 30 years, it keeps you connected with new and updated names, mailing addresses, email addresses, phone numbers and fax numbers each year. Searching is easy with: • Alphabetical and geographical listing of lawyers and law firms • Alphabetical listing of Judges Also quickly and easily access: • Law Societies • Courts of Appeal • Federal Court of Canada • Government of Canada departments • Judicial districts and judicial officials • Incorporated Municipalities • Land registration and information services • Provincial government departments • Boards and Commissions • Law Related Services, Institutions and Organizations • University law faculties ... and more. Durable spiralbound format saves on wear and tear of everyday usage! 4QJSBMCPVOEȕ"VHVTU ȕ- Multiple copy discounts available 1MVTBQQMJDBCMFUBYFTBOETIJQQJOHIBOEMJOH (Prices subject to change without notice) 2014-15 Alberta Legal Telephone Directory – the right connections made easy. Order your copy today. Visit www.carswell.com or call 1-800-387-5164 for a 30-day, no risk evaluation Untitled-3 1 14-06-17 9:16 AM

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