His price tag is a cool $1.3 million: he wanted $1.5—that's what all the big guns are getting these days, he said—but the firm didn't blink. Despite all the usual confidentiality and utmost secrecy clauses, the Street knows how much he's getting, because his new partners know it. Not all of them are impressed. Few, if any, have ever walked away with $1.3 million after the split (“Can ya' believe he wanted 1.5?”). Is he worth it? The partnership is divided.
As it should be. Since “cherry picking”—luring a competitor's top performers over to your side—entered the legal lexicon in the 1990s, lateral hires, both senior and up-and-coming talent, have invigorated law firms, attracted new work and raised the bar for the home team. They have lent instant credibility to greenfielded offices, injectedadrenaline into languishing practice areas, and launched critical business lines straight to the top.
But cherry picking has a dark side, too: a legion of laterals who have not lived up to their hype. Worse, some laterals have become scapegoats for a firm's inability or unwillingness to commit and follow-through on critical business strategy. So which will the $1.3 million-man be? The “saviour,” who takes the firm, or at least a key practice area or a strategically essential office, to the next level? An overpaid, underperforming prima-donna? Or the scapegoat, predestined to fail because his partners won't walk the talk?
At different times, he will be all of the above. The intriguing part: he (or she) is becoming a common story. In 1991, when litigator Lenard Sali, Q.C., left Milner Fenerty (now Fraser Milner Casgrain LLP) for Bennett Jones LLP, Calgary reeled. In 1993, when Stikeman Elliott LLP convinced David Gillanders, Q.C., to leave Lawson Lundell LLP to open up their office in Vancouver, it was an absolute scandal. When Stikeman Elliott, in turn, lost corporate heavy-weight James Riley to Ogilvy Renault LLP's greenfield in Toronto in 1996, Bay Street was astounded. By 1998, when Vancouver superstar Mitchell Gropper, Q.C., left McCarthy Tétrault LLP for Farris, Vaughan, Wills & Murphy LLP, he was just one of about 30 high profile lateral moves; by the time Ogilvy Renault cracked 100 lawyers in Toronto—and Bennett Jones' Hugh MacKinnon went on the highest ticket hiring spree the Street has seen to date—lateral moves were a fact of life.
But not a well-understood fact of life. Which is unfortunate, because in today's marketplace, those firms that learn how to leverage lateral talent have a huge competitive advantage. Today, luring a lateral over is easy. Ensuring that he or she delivers, on the other hand, needs some sweat equity.
THE PRESSURE'S ON. Of the dozens of lateral moves that took place during the first half of 2006—remember when there were barely a dozen lateral, never mind notable lateral, moves in a year?—the two under particular scrutiny are Jeffrey Barnes' move to Heenan Blaikie LLP in Toronto and the decision by Robert Desbarats, Q.C., to cross two streets and three avenues to Osler, Hoskin & Harcourt LLP in Calgary.
Jeff Barnes is expected to perform a miracle. Montreal-outbound Heenan Blaikie has carved out a strong niche in the Toronto marketplace in its traditional areas of labour and employment and entertainment law. It hasn't breached Bay Street's corporate club. The firm has tried—and frankly failed—to do this twice or three times before, and in much the same manner: recruiting a well-regarded, reputedly well-connected senior corporate lawyer to, as one Bay Street observer puts it, “get Heenan into the zone.” Can Barnes pull it off?
“Yup,” he says. “I wouldn't have done it otherwise.” His resignation from Fraser Milner Casgrain (FMC) in early 2006, after 15 years at the firm and a prolonged stint as chairman, to “explore options” had tongues across Canada wagging and wondering where he would land. It is understood that virtually every law firm of note on Bay Street took a hard look at his credentials; it is rumoured Heenan Blaikie and another law firm (perhaps Baker & McKenzie LLP—another firm yet to get into the “corporate zone” in Toronto) even got into a bit of a bidding war to land him. So the pressure to perform—and deliver—is certainly on. He's expected to “practise law,” he says. “I won't be a manager; the understanding both ways is that I won't, because that is not the best use of my time.” So what is the best use of his time? “Practising law, interacting with the community, originating work and participating in the continuing education part of law.”
And when does the firm expect to see results? “There are not bright line goals,” says Barnes. “Some people expect you to drag strong boxes in the door on the first day. The reality is that somebody who brings in a silo of files, that's another type of lateral—they drag them in to work on them and not much else, they are not that additive to the firm.”
But he knows Heenan expects results, and he believes the firm's strategic take on where the Canadian marketplace is going is dead on. “The Canadian legal business is a pretty fluid marketplace right now, and the firms that first apprehend they are in business and keep a close watch on the marketplace are the firms more likely to succeed,” he says. “Although Heenan has started from a different position [than some of its competitors], it has shown that nimble approach, customizing growth, meeting the demands of international aspects of practice.” The opportunity to breach the corporate citadel on Bay Street is there. The question is, will Heenan Blaikie give Barnes the time and resources—meaning a citadel-breaching corporate team—to do it?
“I'm through that scary period when you've met 10 people from the firm who seemed to get it, and you worry that when you meet the next 100, they won't get it, and you were hired by the minority,” says Barnes. “That's not the case here, but I think that happens a lot to laterals—they were hired by the most progressive element and they spend the rest of their lives dealing with the rest of the firm.” Read: he thinks Heenan Blaikie knows the wonders it hopes Barnes will perform won't happen overnight. Or next month. But next year?
Robert Desbarats isn't expected to perform a miracle: he's already done it. If there was a betting pool in the Calgary market as to which Bennett Jones partner would get poached by Osler next—starting with Lorne Carson in 2003, Osler has acquired some 14 Bennett Jones lawyers—Desbarats' name wasn't on it. “It would have been a difficult decision for him,” says a Calgary lawyer. “I think what it came down to [is that] he really missed the people he used to work with.”
Whatever. Getting Desbarats is the key in Osler co-chair Brian Levitt's strategy in getting momentum in the Calgary market: the strategy, for those who weren't paying attention, seems centered on recruiting Bennett Jones' partners. That's an effective strategy for both a) getting the attention of the market and b) getting top talent, of which Bennett Jones has long had a disproportionate chunk. And Desbarats is not expected to pull any rabbits out of his hat. He basically has to be himself: one of the most highly regarded (and highly performing) energy lawyers in a market gone crazy. Pulling rabbits out of hats is the provenance of Levitt and the management brain trust at Osler.
ROLODEX, PLEASE. “Osler was looking for a rolodex and Bob Lehodey was looking for a firm with an actual strategy,” says Bob Lehodey, Q.C. (Lehodey is a Calgary lawyer and as of early June, the latest Bennett Jones alumnus to end up at Osler.) The firm's acquisition of Lehodey wasn't quite the seven-day wonder in Calgary that Desbarats continues to be. Lehodey is not as senior, nor, having come as a lateral to Bennett Jones from the now defunct MacKimmie Matthews in 1997, as entrenched in the fabric of Calgary's dominant law firm as Desbarats was. It surprises no one that he ended up at the law firm that has in the last 12 months poached more than a dozen of his former
colleagues.
He downplays that: “As a lateral, I could bring existing relationships that could strengthen and broaden [any] firm's client base,” says Lehodey. “What any firm is looking for in any lateral hire is the opportunity to build and refresh their strategy, to evaluate what is it we're doing right, what is it we're doing wrong, what can this individual bring in terms of additional market intelligence and ideas to help us hone our strategy and ideas in this particular market.”
Whether Lehodey's rolodex will give Osler what it needs remains to be seen. A couple of towers over at the Calgary office of FMC, firm vice-chair and 2002 lateral hire Douglas Black, Q.C., offers proof that an acquired rolodex—when attached to a person who knows how to use it, in the context of a firm that knows where it is going—is a fine thing indeed.
“He delivered,” says B.A.R. (Quincy) Smith, Q.C., managing partner of FMC's Calgary office. “What was expected from him was that he'd be a guy who would create business and bring us clients and he has been able to do that to a large degree.” Jeff Barnes, who was FMC's chairman when the firm was recruiting Black, concurs. “Doug is an extremely effective marketer, extremely strong at forging new client relationships and expanding work the firm gets from old client relationships.”
“He has performed beyond the expectations that I had and they were high,” says David Tavender, Q.C., a senior litigation partner with FMC. Tavender was instrumental in harnessing Black's energy in FMC's cause. The well-connected Macleod Dixon LLP partner was poached by Ernst & Young in 2000 for its ill-fated Donohue & Partners venture. When Donohue was crumbling in 2002—and most of its Calgary lawyers heading to McCarthy Tétrault—Tavender, Smith and Barnes scooped up Black. “He has performed exquisitely,” says Tavender. “He has the ability to build business development with old and new clients. He has tremendous energy and a wide range of connections that he pursues assiduously. Out of this, we have gained significant new business and he has helped to cement some of our old client relationships.”
Heenan Blaikie is hoping Barnes' rolodex does something similar in Toronto.
THE INDIVIDUAL OR THE PLATFORM? It's a good strategy but one fraught with danger. The recruiting firm has to be clear whether it's getting heavyweights who lend credibility to its roster or a feeding tube to the lawyer's former clients—who, particularly at the larger firms, are more likely than not, really the firm's clients.
When Blake, Cassels & Graydon LLP recruited corporate deal maker Eric Spindler from McCarthy Tétrault in 2002, they were not after Spindler's book of business, which was intimately intertwined with that of numerous other lawyers at McCarthy Tétrault.
“We talked about that at the time, and what they said is, that's not why we're hiring you, we want your skills and experience: if clients come, that's not a bad thing, but that was not the rationale,” says Spindler. Not all firms—particularly those not seasoned in lateral recruitment—are as wise.
“Particularly on the corporate side, people that are as top tier as you get, involved in the biggest deals, what they usually bring you is a tier one skill set, but not a guaranteed portable practice,” says Warren Bongard, vice-president of ZSA Legal Recruitment. “A firm has to know what it is hiring for. If it is hiring for talent, then the clients are gravy. But if it is hiring for a book of business, it has to be very careful. If I had to pick one reason why a lateral move is not successful, it would be when the lateral represents a practice as fully portable, and then only 20 per cent of the clients go to the new firm.” And if the lateral's home firm really walks the talk on “all clients are firm clients,” that's precisely what will happen: that is especially true if the firm's “business critical” practice areas, as in most leading law firms, are not portable silos. (It's also the reason why the success rate among litigation laterals is much better than that of their corporate counterparts.)
“One of the bigger issues is that there are lots of people who are more successful because of where they are, than who they are, and it's very difficult to tell that,” says Richard Orzy, a Bennett Jones acquisition from McCarthy Tétrault. “One of the times you find out is when they pick up to move. We all like to think our clients are coming to us, not the firm, but sometimes that's just not true.”
In the case of Orzy's insolvency practice (with a
predominantly US bondholder client base) the clients came and kept on coming. In retrospect, Orzy's 2001 move was a watershed event in Bennett Jones' version 3.0 in Toronto. As one Toronto lawyer puts it, “If they could satisfy a hard-ass like Orzy, that either meant that their story was really compelling...or they had a lot of money.”
Or a combination of the two. Since taking the reigns of the Toronto office in 2000, MacKinnon has recruited heavy hitters from each of the Seven Sisters, marquee boutiques and up-and-comers from almost every Toronto firm of note. A sampling; Bruce Barker (McMillan Binch Mendelsohn LLP), Duncan Card (Ogilvy Renault via Davies Ward Phillips & Vineberg LLP via Lang Michener LLP), Paul Mantini (Smith Lyons), John Rook, Q.C., (via Osler), Dino Clarizio and team (of the eponymous IP boutique) and, of course, Alan Bell and Jeffrey Kerbel (via Blakes)—all top-of-their-game individuals at highly regarded platforms. Most are performing well at the Bennett Jones platform (Orzy is reputedly one of the firm's top billers).
The most recent addition is a sextet from Torys LLP (Barry Reiter, Gary Solway, Len Griffiths, Jane Helmstadter, Geoff Dyer and Peter Birkness), crossing over in May 2006 amidst fall-out from the $30.25 million Hollinger settlement and related issues, including a controversial (read: disappointing) point split. Torys is downplaying the departures, while Bennett Jones is stressing each is essentially an individual acquisition—they are not coming over as a group. The six (and the associates who have followed) puts Bennett Jones within spitting distance of 100 lawyers in Toronto—a psychologically important, if practically irrelevant, milestone. But apart from that and some historical ironies—Torys is, after all, the firm Bennett Jones didn't merge with in 1999, and MacKinnon and Reiter were on the deal team that didn't make it happen—the moves also show how jaded Bay Street has become to lateral moves.
“Structurally, this is not damaging to Torys and it's not going to revolutionize Bennett Jones either,” says one observer. Six Torys partners going to Bennett Jones a yawner? How far we've come.
A LITTLE BIT OF PARANOIA NEVER HURT ANYBODY. “When you come to a new place, especially the way Bennett Jones was when I came over, just breaking through, there is a certain sense, I had better make this work,” says Orzy. “When you come to a new place, whether you are the most competent person or not, there is a certain sense of urgency...an invigoration.”
Or, as Cal Goldman, Q.C.—chair of the top-ranked competition group at Blakes and a self-described three-time
lateral—might put it, a lateral who will deliver the goods doesn't “coast” when he changes team; he or she works like a dog. “You're going to spend more hours and more time and you cannot rest in any way,” he says. “It is a competitive world.... One can make no assumptions whatsoever that the success that the individual has enjoyed in the past will continue. That is fundamental to being successful: do not coast under any circumstances.”
Goldman left a thriving competition practice at Blakes to go to the Competition Bureau. After a stint leading the Bureau, he went to build a top-notch competition practice at Davies, then, in 2002 he “went back” to Blakes. The bereft Davies quickly cheered itself up by poaching George Addy—also a former Director of Competition—from Osler. And so the world turns.
“As a lateral, one cannot rest on one's laurels, one has to be even more attentive to the clients willing to follow you to a new firm, and new clients, and not rest for a second,” says Goldman. Each time he moved, Goldman also felt the need to re-invest in his relationships with regulatory authorities. There's more. “It is also important to stay at the forefront of policy development nationally and internationally...to stay at the cutting edge of your practice.”
At least, it's important to do all that when the mandate you get from the recruiting firm—as Goldman did from Blakes and before that Davies—is to take its competition practice to the top.
Goldman came to Blakes shortly after the return of another prodigal son—litigator Neil Finkelstein. The recruitment of both marked a watershed moment in the way Blakes approached laterals. “They both would have been recruited over sizeable internal opposition,” notes one observer. Adds another, “Finkelstein broke the pay scale at Blakes. To bring him over, it showed that Blakes was prepared to pay up when the right talent became available, something it hadn't shown the Street before.”
GIVE ‘EM ENOUGH ROPE. The hole Finkelstein's departure left at Davies was quickly filled by Kent Thomson. A top-notch business litigator at Torys—but perhaps in the shadow of some colleagues who were definitely not going to slow down any time soon—Thomson says he was brought in “to basically build a litigation group into a leading, tier one business law litigation group with that particular focus,” when he went over to Davies in 2002. Davies had a late start on business litigation compared to competitors such as Torys; Finkelstein's departure was particularly disruptive.
“I was effectively written a blank cheque to add or subtract people as I needed and mold the litigation group,” says Thomson. And that's what he did. He culled the existing group—the litigators who left Davies in the 12 months immediately after his arrival are unlikely to remember Thomson kindly—and added several laterals, including Lorne Morphy (effective founder of Torys' litigation department in the early 1970s), Ed Babin (via Torys), Luis Sarabia (via Lenczner Slaght Royce Smith Griffin LLP) and Davit Akman (via Borden Ladner Gervais LLP). “In three to four years, we built a litigation group that is flying on every level,” says Thomson.
The latitude to let a key lateral build a team is critical if a firm is to get full value out of the move. At Blakes, Goldman agrees. “When the lateral is a senior person, my experience in all three of my lateral moves points towards the importance of ensuring that the group of colleagues the lateral is working with are largely, if not entirely, on the same page and that they share the same priorities and objectives. That is essential, because one individual cannot grow a successful practice by himself or herself.... That means if there are individuals at the new firm who do not share the same standards of excellence...or the same objectives of achieving and maintaining top-tier status in one's profession and don't want to work towards that objective, then it is necessary to bring in other individuals who do.” Needless to say, Goldman did some culling of his own (the euphemism is “were encouraged to practice elsewhere”), and aggressively recruited several laterals, including Brian Facey (from Ogilvy Renault), Crystal Witterick (from Davies) and Navin Joneja (from Dewey Ballantine in Washington, D.C.), who all joined the group as partners, and Jason Gudofsky (from Freshfields in Brussels) and Julie Soloway (from Davies), who joined as senior
associates.
Of course, writing that key lateral a “blank cheque to add and subtract” means the firm has to fully buy in to the lateral. “The firm has to develop with the lateral hire a clear mandate, or mission statement, for the lateral to attain, and the firm has to support not only the team building exercise, but in addition, support the business development objectives [and other] initiatives that all support the overall goal of achieving and maintaining top-tier status. The firm has to be totally behind that,” says Goldman. When it does, the lateral delivers—as did Goldman at Blakes, as did Thomson at Davies.
“The key thing, from my perspective, is that Davies had the mission and the mandate to create a truly leading, tier one litigation department that would mirror the tier one departments they have in all aspects of business law here,” says Thomson. Davies adopted a similar attitude when it recruited Peter Glicklich from Roberts & Holland LLP to head its tax practice in New York, and now, to head up the entire New York office.
ROME WASN'T BUILT IN A DAY. Neither was Osler, Blakes or, for that matter, them young ‘uns like Stikeman Elliott or Heenan Blaikie. But with Jeff Barnes less than five months on the job, some Heenan partners are understood to be asking questions. At Stikeman Elliott in Calgary, a lateral that was supposed to do to Stikes what Lorne Carson (or do we mean Brian Levitt?) was doing to Osler is leaving, after less than three years on the job.
David Robottom was managing partner at FMC; more significantly, he had a reputation as first, a corporate deal maker, second, a strategic and business thinker, a builder. When Stikeman Elliott lured him over in 2003, he was the firm's most significant lateral hire in Calgary since...well, ever. As of June 2006, his considerable talents are at the service of Enbridge Inc.
As Stikeman Elliott's chairman Ed Waitzer sees it, Robottom has delivered, despite his brief tenure at the firm. “He has served as an example of how a good lateral works,” says Waitzer. “I talk to him every day, he is still actively thinking about how to build the office. He has made a huge difference in our office in Calgary.” Post-Robottom recruits include several stars from his alma mater, including Craig Story, David Lefebvre, and, most recently, Barb Johnston.
Robottom's own evaluation is more harsh; he hoped to do more. “I had been in management for a number of years at FMC, so my focus over the first year or two was my own practice rather than developing the office,” he says. “My game plan was to build my practice and then work on the lateral hiring. I was quite comfortable with where we ended up on strategy, and we have just formed the committee on lateral hiring. In the interim, it was people who had come to us, rather than aggressive recruiting,” he says. “I was just engaging and looking to build when this thing [recruitment by Enbridge] started to unfold.”
In the meantime, there was Osler, ramping up to 50 lawyers. “Brian Levitt has been very aggressive here. We end up talking to many of the people he talks to,” says Waitzer. They end up at Osler.
Here's the quandary: a “transformational” lateral, one of those $1.5 million earners—or even an up-and-coming 30-something young partner on the way up—needs time to prove she's worth it. Her new partners need immediate results to justify her price tag. She needs buy-in from them before she can do what she needs to do. They need her to “show them the money” before they give her any more money (be it for chasing down more laterals or wooing clients). And so, she founders. Fortunately, the legal market being what it is—and the stigma of “you can only be a lateral once” pretty much gone—she has plenty of options.
LOOKING OUT FOR NUMBER ONE. In 2002, Bruce Sinclair, C.A., and Robert Kopstein left a Vancouver tax boutique and joined Borden Ladner Gervais' tax practice. The firm—one of the top players in Vancouver on most fronts—was looking to “bolster” its tax capability and capture more tax-related transaction work, explains Sinclair. Sinclair and Kopstein needed a national platform.
“For transaction work, no matter how good you are, some clients, and in particular major clients in major transactions, like to see a name,” says Sinclair. “BLG had a strong corporate group and strong capital markets group and offered us the opportunity to participate in more transactions and more major transactions.” To be blunt, the firm and the laterals were each looking out for number one.
That's a constant in all lateral moves. Take Richard Higa's February 2006 move to McCarthy Tétrault from McMillan Binch. Higa bolsters the firm's expertise in asset-based lending and mezzanine lending—two of his key areas of practice—and adds “bench strength” to McCarthy Tétrault's existing financial services practice “to build higher market share with key clients,” says Higa. And Higa, like Sinclair and Kopstein in Vancouver, gets a platform. “It was a move to a national platform, a much bigger platform, a national client base,” he says. In other words, it was a move that was good for his career.
The same is true for Wendy Gross, who found herself heading up the Torys outsourcing practice upon the retirement of Gabe Takach: she moved to McCarthy Tétrault in April 2006. “I was thinking about needing more depth around me,” she says. “These outsourcing transactions are huge, you need a huge team of people, you need the depth and resources that McCarthys had around you. It seemed a good fit.” The Street saw Gross' move as good for McCarthy Tétrault and a setback for Torys; some have questioned its value to Gross. She is now part of a team led by George Takach and Barry Sookman—who cast long shadows—and surrounded by a dozen or more of the most highly regarded IT practitioners in Canada.
“People have questioned my decision for this reason,” admits Gross. “Over at Torys, with Gabe's retirement, I was the leader, now, people have said, you're not the leader anymore.” A step down? “My view is not so much that I am in the shadow of two great profile people, but that I am joining the team, the dominant firm in the area by a long shot. I think I've managed to develop enough of a profile in my own right that I'm not going to fade off into obscurity. I hope this is going to bolster my profile and my longer term prospects.”
Law firms built on laterals learn how to intertwine the lateral's career prospects with the well-being of the firm; firms inexperienced in leveraging lateral talent may fool themselves into thinking laterals join them to bring value to the firm. And it just doesn't work that way. It's up to the law firm—its management, practice leaders and established partners—to ensure the lateral's move benefits the firm as much (if not more) as it benefits the lateral. The lateral's first concern is the lateral. (A fact of life that should be easy to understand.)
GET ‘EM YOUNG. Higa and Gross do not come with a $1.5 million price tag. Neither do most of Osler's recruits in Calgary or Montreal, or the FMC-outbound partners Stikeman Elliott has picked up in the last 12 months. While the Street tends to focus on the hefty 50-something partners who change firms at the top of their game (occasionally over the hill), several firms, McCarthy Tétrault key among them, have been focusing on adding a “cheaper” demographic of lawyer: “the late 30s, early 40s
vintage,” as Higa puts it.
A noteworthy McCarthy Tétrault acquisition in Montreal is corporate partner Clemens Mayr, who made the move from Ogilvy Renault in February 2006. “It was a great opportunity, because Ogilvy Renault for me, at my level, is a crowded place,” he says. “Here I can take ownership of a number of initiatives without stepping on other people's toes.... There is a huge generation gap: a number of more senior and well-respected practitioners and there is a whole bunch of senior associates and young partners, very talented and well-trained, but at my level, around age 40 or so, there is a great opportunity because there are not a lot of people.”
In fact, if you are a skilled Montreal lawyer in that age group, you can write your own ticket right now. “There is almost a lost generation in that market,” says Ed Waitzer. “In Montreal, probably all the firms would like to have more depth at that level and would love to find it, but there is this big black hole in the market.”
One you can't blame on Brian Levitt (it was the economy), although there is no question that the aggressive entry of Osler, with Blakes following, into the Montreal marketplace, shook things up; those moves facilitated an unprecedented number of lateral moves, and not just into the greenfielded offices of the Toronto powerhouses. (Although Osler has scooped up some goodly names and up-and-coming talent: Michel Benoit, George Hendy, Robert Raizenne, Elaine Marchand, Shahir Guindi and Etienne Massicotte to drop a few names.) Ogilvy Renault, Stikeman Elliott, McCarthy Tétrault and Davies have exchanged not a few lawyers among themselves (e.g., Simon Potter from Ogilvy Renault to McCarthy Tétrault, Sidney Horne from Davies to Stikeman Elliott).
Another competitive element is provided by Montreal upstart BCF LLP, narrowly focused on specific business law practice areas, and paying as much as, if not more than, Osler for top talent, and outrageously profitable to boot. “We have built our firm on lateral hires and cherry picking people who have the same entrepreneurial spirit as the founders,” says Jean-Yves Fortin, BCF's chairman. BCF has grown from eight professionals when it opened its doors in 1995 to 85 today; about 30 of those are laterals acquired at partner level. P. Mario Charpentier, one of the founding partners of the firm, believes BCF offers entrepreneurial Montreal lawyers with focused practices an attractive alternative to the national law firms “where they sit there waiting for business to fall on their desk.”
POWER TO THE LATERALS. “When you look at the leadership in our Toronto office, and compensation in the Toronto office, probably half of our senior, top-performing guys are laterals,” says Ed Waitzer. Recent noteworthy additions include David Ehrlich, Jeffrey Singer and David Weinberger from Goodmans LLP, Doug Klassen from McCarthy Tétrault and Joel Binder from Fasken Martineau DuMoulin LLP, all of whom are seen as making significant contributions to the firm's spirit and culture. With the firm consciously committed to pursuing heavyweight lateral talent at both junior and senior levels—and everywhere in between as opportunities arise—it's even possible that Stikeman Elliott's next chairman will be a lateral.
And it won't raise any eyebrows (well, maybe in Montreal). The ground has been well-paved. Patricia Olasker (formerly of McMillan Binch, where she was co-managing partner) now sits on Davies' management committee. Doug Black (via Donohue and Macleod Dixon) is FMC's vice-chair and the not-so-behind-the-curtain wizard behind the firm's cross-border strategy. But the most significant examples of lateral power come from Osler. Both of the firm's current co-managing partners, Dale Ponder and Steven Sigurdson, joined the firm as senior associates from Borden & Elliott (1986) and Lang Michener (1989). And much of the firm's strategic direction, today and through the 1990s, has been shaped by laterals, perhaps most notably Blakes alumni Linda Robinson, Jean Fraser and John Evans, who came to the firm in 1993 following another influential Blakes import, Don Ross, who had crossed the street in 1989.
“It was a very hard decision for all of us and hard for Osler as well,” says Robinson. “Now we routinely admit laterals. But at the time, it was a big deal. The firm wondered, are we importing Blakes' culture? How will it change us? We weren't young, and John Evans was a senior practitioner, well-regarded on the Street, with a reputation as a strong-minded person. There was some angst on how this decision was going to change the cozy Osler culture.”
And change it they did—with the homegrown team's blessing and participation. “Very quickly they figured out the three of us had different skills and they used these skills in different ways, whereas other firms may have let us languish as laterals for years until they trusted us,” Robinson
continues.
Almost immediately upon arrival, Fraser found herself chairing the compensation committee. Then she was managing partner, steering Osler through a critical strategic plan. Robinson chaired the corporate group, the compensation committee, and now leads the firm's business law practice. Evans played a critical role throughout, and now continues to chair the firm's ethics and conflicts committee. And Don Ross chairs the firm's cross-border practice and effectively heads up its New York office.
A culture that welcoming and trusting of laterals was a big selling point for Bob Lehodey. “The laterals at Osler, to my amazement, are very influential in management,” says Lehodey. “Osler has a history with lateral hires in all of its offices. They have significantly added value, broadened the firm's relationships in the community, helped the firm build strategies and poke and prod existing strategies.” Would a MacKimmie Matthews import ever run the Calgary office of Bennett Jones? Possible, but unlikely. Will a Bennett Jones alumnus run the Calgary office of Osler? Given the current make-up of that office, almost inevitable.
A caveat: as firms get bigger and bigger, it may be harder for one lateral—or even a group of laterals—to make the sort of impact that Robinson's cohort had on Osler. “When you're dealing with firms that have as many as 700 lawyers, it is difficult for one single individual to either revolutionize or destroy a firm by their arrival or departure,” says Christopher Sweeney, president of ZSA Legal Recruitment. “For a small firm of 30 lawyers, an arrival or the departure of a key individual is more likely to have a greater impact,” he says. “The size of the firm minimises the impact of a single individual leaving.” Or coming.
MORE TO COME. Jeff Barnes knows Bay Street (not to mention his partners at Heenan) are watching him; he, in turn, is carefully watching the Street. The lateral moves of the last 12 to 24 months, he says, have been high in number, but low in the “wow” factor. “There have been some good people who have moved, and some people with high technical skills, and other moves that have been interesting because it has been four or five people leaving a place,” he says. But really significant, transformative moves? No—but they're just around the corner. “What will come up in the future, and I don't think it will be that far in the future, is, as firms go a little further to define what they want to and what they can do, and as they are more direct and honest with themselves about what they can't do, you will see some departures that, at least on a minimum practice area basis, will be a big deal.
“There will a continuing sorting out.” And laterals will be the currency.
Marzena Czarnecka is a Calgary writer and regular contributor to Lexpert.
