Could mergers sound death knell for regional law firms?

Trend leaves few large firms with operations only in B.C. or Western Canada

Bull Housser Tupper managing partner Janet Grove will remain managing partner of the Vancouver office following her firm’s merger with Norton Rose Fulbright | Rob Kruyt

Vancouver-based law firm Bull Housser Tupper LLP’s (BHT) September 12 merger with global legal giant Norton Rose Fulbright (NRF) has raised questions about the viability of large independent regional law firms.

BHT was the city’s sixth-largest law firm with 95 lawyers, who are all based at the company’s new office on three floors of Telus Garden, according to Business in Vancouver’s 2016 list of largest law firms.

The deal is the latest of a half-dozen recent mergers between big national or international players and smaller B.C.-based firms.

Legal recruiter and the Counsel Network managing partner Warren Smith told BIV that the local mergers reflect a global trend and are a sign of the city’s coming of age.

“It’s really reaffirming that Vancouver has a real position, not just in the national context but in the global context, as being a market where law firms and businesses need to have high-level representation,” Smith said.

He added that the BHT merger raises the possibility that other regional law firms with a strong presence in Vancouver could also be taken over by global behemoths. Those firms include Lawson Lundell LLP, Farris Vaughan Wills & Murphy LLP and Clark Wilson LLP.

BHT managing partner Janet Grove explained to BIV that her firm had been part of the legal affiliation organization State Capital Group and that it had used that group to refer clients to law firms outside of B.C. and in exchange get referrals.

She said merging the 126-year-old BHT with NRF will make legal work more seamless for clients who have national or international business. Merging will also streamline costs and make the firm’s operation more efficient, she said.

“They’re embracing leading-edge technology platforms and knowledge management platforms that are really going to make the delivery of legal work and services to clients more efficient, seamless and aggregated,” she said. “It sounds corny but I’m a commercial technology lawyer and not all lawyers believe in embracing change in the future, or embracing change at all.”

Managing partners at some of Vancouver’s larger firms that conduct business exclusively in B.C. say they are not interested in merging with international partners.

“We’re a member of Lex Mundi, which is the leading association of independent law firms in the world,” said Keith Mitchell, Farris’ managing partner. “We have the confidence that if we refer our clients to another jurisdiction, they’re not with a branch office. They’re with a leading firm in whatever jurisdiction we choose to exercise that reference.”

Both Mitchell and Clark Wilson managing partner James Speakman say that their firms have been approached over the years many times from national or international firms seeking mergers. No proposed deals offered what appeared to be any extra value to clients, they said.

Clark Wilson is part of the lawyers’ affiliation group International Lawyers Network (ILN), although Speakman said that group does not require Clark Wilson to send all referrals to ILN member firms.

“If we do get involved in a transaction outside the province, we have really deep and long-standing connections through network affiliations and peer relationships with firms in Calgary, Edmonton, Winnipeg, Toronto, Montreal, Seattle and San Francisco,” Speakman said. “This way, we’re not tied so we have to refer clients to any particular office. We can pick the right adviser for our clients in those markets based on the kind of transaction.”

Speakman said one advantage of operating independently is that the firm can save operational costs. 

Mitchell added that many of Farris’ 107 Vancouver lawyers like having the sense that they are determining their own destiny. Were Farris to become part of an international conglomerate, decisions affecting Vancouver lawyers might be made in other cities. •