Editorial: Heenan Bleak-ey

Weep, weep for Canada’s corporate lawyers.

OK, maybe not. But the near demise in early February of one of Canada’s pre-eminent law firms, Heenan Blaikie, has brought with it renewed attention on the grinding pressures and sweeping changes facing Canadian legal firms.

Heenan Blaikie was founded in Montreal in 1973 by Donald Johnston, Roy Heenan and Peter Blaikie.

Since its inception, the firm has had strong connections to the Liberal Party of Canada, and its troubles in recent years in some ways mirror the Liberal Party’s disarray during the Ignatieff years.

Johnston became a versatile Member of Parliament from 1978–1988, serving various roles in the federal Liberal governments, including as President of the Treasury Board, Minister of Justice and Attorney General of Canada. He later became president of the Liberal Party of Canada and Secretary General of the Organisation for Economic Co-operation and Development.

Heenan Blaikie shot to national prominence in 1984, when former Prime Minister Pierre Trudeau joined the firm as counsel, a role he retained until his death in 2000.

The 1980s and 1990s were a period of national growth for Heenan Blaikie, with substantial new offices in Toronto, Ottawa, Vancouver and other cities, creating one of Canada’s first legal firms with a truly national reach.

Its close connection to the Liberal party was highlighted again in 2004, when former Prime Minister Jean Chrétien joined as counsel in Montreal. (Just last month, the firm put on a gala evening to celebrate Chrétien’s eightieth birthday.)

By 2007, Heenan had 1,000 lawyers, managers and employees, and was ranked as one of the top-50 “Best Workplaces in Canada” by Canadian Business magazine.

That all changed on Feb. 1, 2014, with news that a third of Heenan Blaikie’s 500 lawyers were out the door at its eight offices across Canada, and that the firm would undergo “major restructuring” that could include winding up the firm, breaking up its offices or a quick sale to an American firm looking for a toehold in Canada. This followed on the heels of a steady stream of departures of some of the firm’s best personnel over the past few months.

The quick collapse has set off a feeding frenzy amongst rival law firms eager to gobble up Heenan’s top talent and client base.

Industry observers point to a few reasons for Heenan’s swift fall, including the squeeze that’s happening across the legal and financial-service industries in Canada, as regulatory burden increases and revenues get thinner for mid-tier firms, particularly in light of the downturn in Canada’s resource sector.

Heenan Blaikie itself had a 44-member mining group with a substantial presence in its Toronto, Montreal, Calgary, Vancouver and Paris offices. The firm boasted highly skilled resource-focused lawyers such as Steve Vaughan in Toronto (a frequent director of junior mining companies) and Pierre Langlois in Montreal, as well as Frederico Marques, Kevin Rooney, Lynn Mitchell and William Skelly.

Two of Heenan’s strengths with respect to mining were its solid grasp of the Quebec scene, and its experience with negotiating impact-and-benefit agreements with aboriginal groups.

Some of its mining clients in recent years have been Cliffs Natural Resources at Bloom Lake, Donner Metals, Cap-Ex Ventures, Dia Bras Exploration, Iberian Minerals, Rio Novo Gold, Aurelian Resources, Rio Verde Minerals, Quest Rare Minerals, Serabi Mining, Argex Titanium and Kamoto Copper.

Looking through the above names, you can see most of the clients were small outfits — so when the downturn hit the junior miners hard, it hit Heenan Blaikie even harder.

[Update: On the evening of Feb. 5, Heenan partners voted to dissolve the firm, with an “orderly wind-up” to take place over the next few months. It’s the largest failure of a law firm in Canadian history.]