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of M&A practitioners end up getting in- volved in those types of deals, as they are effectively large-scale M&A deals. In terms of capital markets transac- tions and corporate finance, things were quite hot from late 2003 until last July, says Gordon Chambers, head of the cor- porate finance and securities group at Lawson Lundell LLP in Vancouver, who notes that a large part of his practice is related to the mining industry. Lawyers involved in the mining sector have since seen a marked shift in activity from eq- uity capital-markets work to M&A. The sector remains strong, says Chambers, and companies are affected much more by global commodity markets and local economic events where they are based around the world. There is a "dramatic shift from com- panies just doing prospectus offerings to M&A," says Chambers, which he thinks will continue throughout the year and will keep lawyers just as busy as corpo- rate-finance work — so much so that the practice is considering adding ad- ditional capacity but is having a tough time finding the lawyers. "I'm optimistic about how busy we're going to be this year," he says. Romano agrees the corporate-finance sector is slow at the moment, continuing to suffer from the fall off of the income- trust sector, which was driving intense amounts of activity in 2006. Coupled with the general negative environment for equities, Romano says he thinks it will be a difficult market in which to raise equity and debt. Commodities are still the one bright spot, he says, but it is a tough market. It's hard to tell whether this will pick back up by the end of the year, he says, as the public has to get comfortable. That's not really happening as everyone is still uncertain due to day-to-day market swings. In the west, the high costs of doing business at the moment, along with the low price of natural gas, have resulted in many Albertan junior to intermedi- ate oil and natural gas producers falling out of favour with investors, says Kent Kufeldt, a partner with Macleod Dixon LLP in Calgary. Equity financings, in particular for the smaller producers, are going to be few and far between, he says, as it seems like investor sentiment is not focused on the oil and gas business at the moment. Recent uncertainty in Alberta over the revised royalty regime, coupled with investor sentiment, could mean compa- nies are not proceeding as fast with their capital expenditures and may find them- selves squeezed between a low commod- ity price, no access to capital, and rising royalty and other costs, he says. This could likely force some smaller com- panies into an M&A type situation, he says. "I can expect far less activity on the financing front and more activity on the M&A front here as we move through the first part of 2008." As a result, for law firms there will be an adjustment in workloads due to busy spots and slower spots, because of the nature of a transactional-based atmo- sphere that will be in place for the next while, says Kufeldt. "I don't think that . . . for law firms it's going to be a precipitous drop off, but there will be slower periods than there have been in the last number of years." At the same time, he notes, insolvency and restructuring lawyers have a lot more work to do now than they had over the last five years. On the securities side, a slowdown or a choppy market, and then on the litigation/insolvency side, I think, the corresponding pickup as troubled companies require assistance," he says. In Atlantic Canada, while the insolvency market has generally been quiet, John McFarlane, a partner with Stewart McK- elvey in Halifax, is anticipating things to pick up this year, although the extent is difficult to foresee. Justin Fogarty, a partner in the Toronto office of Bennett Jones LLP, is expecting bankruptcy and restructuring practices to be very busy in the second and third quarters of the year because of liquidity problems cou- pled with the high Canadian dollar and the impact of the slowdown in the U.S. economy. Although there was a lot of liquidity in the marketplace at the start of 2007, says Fogarty, and a lot of funds chasing too few deals — which were done with a fair amount of credit risk — it has dried up with the arrival of the credit crisis. "There are companies that were able to — through an M&A deal — get themselves out of trouble," he says, or companies that were able to get equity or financing even though performance was not that great when there was a lot of liquidity in the marketplace. How- ever, at the moment, if there is a shift in sales or performance and a shift in the dollar companies that were able to take advantage of a competitive situation are not there. His concern is for mid-market compa- nies, rather than for the bigger Canadian operations that have already adjusted. "China has had an effect on Canadian business for some time . . . the Canadian economy has made adjustments for that "I don't think that . . . for law firms it's going to be a precipitous drop off, but there will be slower periods than there have been in the last number of years." — KENT KUFELDT, MACLEOD DIXON LLP www. C ANADIAN mag.com APRIL 2008 41