IN THIS ISSUE:
 Cover Story  
Oil and Water
by Marzena Czarnecka

Pipeline proponents and opponents hold starkly different views about the Canadian economy. How much compromise is needed to get the pipelines built?

Pipeline projects have rarely been uncontroversial. The 1956 approval process for what would become the first TransCanada pipeline, connecting consumers in Ontario and Québec to the supply of natural gas in Western Canada, effectively brought down the federal Liberal government that pushed it through, and ended the careers of several prominent politicians, including then Minister of Trade and Commerce, C.D. Howe.

But none have even approximated the polarization, passion and outright hysteria currently accompanying the proposed trans-provincial Northern Gateway pipeline and the now stalled cross-border Keystone XL pipeline. Whether one listens to the projects' proponents and their advocates – including the unabashedly partisan, pro-pipeline federal government – or the environmental and community groups lobbying against the project, the rhetoric is beyond inflamed, and anything that smacks of compromise is apparently off the table.

Why? Simply, because the stakes have never been higher. Not for the environmentalists, not for the project proponents, and not for the energy-focused Canadian government. In 2010, energy products accounted for more than 22 per cent of Canada's export revenue. Not all of that is the oil sands crude that would flow through Gateway and Keystone, of course, but Harper's policy-makers see oil sands production alone increasing the Canadian GDP by nearly $800 billion between 2000 and 2020. Currently, Canada exports 69 per cent of its crude, oil sands and other, most of it to the United States. Gateway in Canada would bring that supply to the West Coast; and while Keystone XL in the US is nominally about getting it more efficiently to the US market, it's ultimately about getting that supply out of Port Arthur.


 Feature Story  
Coming up from Behind
by Sandra Rubin

On-shore legal process outsourcing in Canada has been operating on the fringes for a while. It may be about to enter the mainstream

Picture a triangle divided into three horizontal sections. Put legal work that pays the most at the top and low-paying, repetitive, process-driven work at the bottom. This is a law firm value pyramid — and far from the bloodless management tool you might imagine, it is the battleground for some of the most interesting skirmishes in the legal world.

At a time when large firms everywhere are already juggling client cost controls, aging partnerships and a shrinking corporate base, another threat to their revenue stream is emerging — a whole new class of Canadian legal process outsourcers who can undercut them on rates and keep the work entirely on shore.

There is not much scuffling over the tip of the value pyramid, which houses top-end work such as mergers and acquisitions, bet-the-farm litigation, initial public offerings and major financings. Everyone agrees that remains a law-firm stronghold. But battles are shaping up over the bottom section, which contains low-value commodity work such as document review. While that area has largely swung to outsourcers in recent years, some law firms are mounting offensives to take parts of that work back.
The Litigator's Renaissance
by Julius Melnitzer

Rumors of their demise notwithstanding, litigation departments at large law firms have been buoyed by class actions

The litigation departments of Canada's major firms have experienced profound change in the past 20 years. Inevitably, so have the fortunes of counsel and their place within the hierarchies of law firms.

The early '90s saw the beginning of a trend that has not ebbed, as major litigators like Alan Lenczner and Cliff Lax formed their own boutiques to compete with their former partners. Simultaneously, the national expansion of Canada's major law firms heightened the problems arising from conflicts, as did the Supreme Court of Canada's decision in Neil, which prohibited lawyers from acting against the business interests of their clients. Adding to the pressure, the commoditization of traditional litigation forced most of the bread-and-butter volume litigation, like insurance defense work, out of the large firms. By 2007, the volume of litigation had diminished so substantially that it was no secret that Canadian courts were looking for work.

Class actions, however, have changed the dynamics of litigation departments and law firms. “Class actions have been a real growth area for our firm and for most of our competitors for the last decade, and that's important in a legal marketplace that as a whole is not growing at a fast rate,” says Doug Bryce, a corporate and securities lawyer in Osler, Hoskin & Harcourt LLP's Toronto office. “What that means internally is that the people doing that work have the wind in their sails and are achieving a certain level of success.”