Legal market overview
Despite an expectation that the slump in global commodity prices would hit Canada hard, consolidation in the mining and oil and gas sectors and an increase in private equity activity has seen overall deal value rise steeply. Canadian M&A was worth a weighty $122bn in the first half of 2015, which represents a 35% hike compared to the first half of 2014. That uptick comes on the back of an M&A boom the year before, which saw total deal value climbing from $147.2bn in 2013 to $203.1bn in 2014, according to Thomson Reuters data. Against this backdrop, it is not surprising that Canada is back in favour as a destination of choice for global law firms.
Following on from the arrivals of international heavyweights Norton Rose Fulbright in 2011 and Dentons in 2013, all had been quiet on the new entry front; the headline collapse of major Canadian law firm Heenan Blaikie in 2014 probably worked to stall some international ambitions. In April 2015, DLA Piper (Canada) LLP became the next foreign brand to enter the market, with its announcement that it had signed a merger agreement with Davis LLP, a full-service national firm with a strong reputation for projects work. Hot on the heels of that development, Canada’s Gowling Lafleur Henderson LLP entered into a tie-up with UK firm Wragge Lawrence Graham & Co LLP; both firms bring prominent IP practices to the union, which makes the move highly notable in that space.
There is no doubt that the growing presence of major global law firms is increasing competition, but the new arrivals have not yet managed to make significant inroads into the dominance of the leading domestic firms. With a few exceptions, the highest profile corporate and finance mandates continue to flow to the so-called ‘Seven Sisters’ of Blake, Cassels & Graydon LLP, Davies Ward Phillips & Vineberg LLP, Goodmans, McCarthy Tétrault, Osler, Hoskin & Harcourt LLP, Stikeman Elliott LLP and Torys. In more specialist fields, Cassels Brock & Blackwell LLP and Fasken Martineau DuMoulin LLP are top choices for mining M&A, Bennett Jones LLP is a leader in oil and gas transactions, and Borden Ladner Gervais LLP is highly regarded for power-related work.
The sheer size and jurisdictional nature of the Canadian legal system makes for a very disparate legal environment. The largest legal centre is Toronto, in the province of Ontario, which remains the key base for corporate deals. Alberta is synonymous with Canada’s oil and gas industry – notably housing the Athabasca oil sands – and thus Calgary remains a hub for energy work. British Columbia is also a major province for natural resources work, with forestry and mining key sectors. French-speaking Quebec, which operates under a civil code separate to the rest of Canada’s common law system, is a very distinct legal market.