Nothing Succeeds like SUCCESS

The growth has been spectacular. In 1982, Canadian mutual fund companies had $4 billion under administration; in 1987 there were some $20 billion in assets; by 1991 that total had grown to $50 billion; by 1993 it had doubled to $100 billion; by 1996 it had doubled again reaching $200 billion; by October of 2000 it had more than doubled once more weighing in at $427 billion.

The ageing of the boomers has made wealth management a growth industry and funds have become the investment vehicle of choice for Canada’s middle class. AGF Management Limited, Canada’s eighth largest mutual fund manager in 1999, generated net income of $299.7 million on $18.97 billion in assets under administration that year. Insiders estimate that net income for the entire mutual fund industry in 1999 was no less than $6 billion. Ernst & Young, operating on the assumption of no major market corrections, projects that by 2008 Canadian funds will have some $1.5 trillion under administration.

As one would expect, given the stakes, it is a crowded market. Per capita, there are twice as many funds in Canada as in the US. In December of 1987, the Investment Funds Institute of Canada (IFIC) had 108 members administering 294 funds. By October of 2000, this figure had grown to 311 members administering 1,574 funds. Mutual funds, however, represent only one segment—albeit a major segment—of the investment funds and the asset management world. It is important, however, not to confuse the public and private fund markets. They are quite different. Overall, Harold Hands, Executive Vice-President, Legal and Secretary of Mackenzie Financial Corporation, Canada’s fifth-ranked fund company, estimates that 120 companies are administering over 3,000 funds of all types, private and public, throughout Canada.

A consensus exists amongst industry observers that funds have completed a period of “hypergrowth” and are now entering a period of “maturation”. For “maturation”, read “consolidation” or “takeover”. As Daniel Stoffman, in his insightful new book The Money Machine (Macfarlane Walter & Ross, Toronto, 2000) notes, quoting from one fund dealer who complained that “‘the fruit that was on the low branches is gone.’ Now companies (can) grow only by taking business from other companies.” Indeed, one of Stoffman’s principle conclusions regarding this current decade is that “The industry will be dominated by a small number of huge companies, most of them global players like Fidelity, and small, innovative companies occupying specialized niches.” Judy Goldring, Vice-President and General Counsel at AGF, is of the same view as Stoffman, but places an interesting spin on the market: “In some ways, the trend in this industry is analogous to what is happening to law firms. We are moving to large firms and boutique shops.”

The question, of course, is what the spectacular success of the funds has meant for the magic circle of lawyers and law firms that represent the industry and, further, what impact a forthcoming period of industry consolidation will have.

The contest is in Toronto, where approximately 90 per cent of fund work takes place. Until as recently as four years ago, Torys was grudgingly seen as the clear frontrunner. Senior partner Marlene Davidge had practically achieved celebrity status within the industry. Other important team members (then and now) were Patricia Koval, Karen Malatest, Dawn Scott, and tax wizard Lucia ten Kortenaar.

Then, in 1996, the legal landscape changed. The Holden Day Wilson law firm collapsed and its highly regarded fund team joined a similarly strong group at Borden & Elliott (one of the predecessor firms participating in the 2000 merger that brought about the new national firm of Borden Ladner Gervais LLP). Suddenly, there was a second “big kid” on the block. Key players were John Hall, Paul Findlay, John Warren, Lynn McGrade, and tax wizard Laura White.

Highly regarded, but not seen as having the same throw weight as Torys or Borden Ladner, are McCarthy Tétrault (principally David Rounthwaite and Ronald Schwass), Osler, Hoskin & Harcourt LLP (Linda Currie, John Bishop, and Judith Harris on tax), and Fasken Martineau DuMoulin LLP (principally David Moritsugu, Stephen Erlichman, and Nigel Johnston on tax). A dark horse in the market, particularly with respect to the issue of industry consolidation, is Stikeman Elliott (William Braithwaite and Jennifer Northcote).

The stakes are high. Marlene Davidge finesses a direct question as to what financial contribution the firm’s investment fund group makes to Torys by simply saying “Our group’s work is a very important part of the practice.” Lynn McGrade at Borden Ladner is somewhat more forthcoming: “Our group gets a lot of respect in the firm, because apart from our billings, we spin off so much work to the labour and employment, litigation, and intellectual property departments.” Martin Guest, Vice-President and Corporate Counsel at Fidelity Investments Canada Limited summarizes the situation as follows, “Ten years ago, or even five years ago, lawyers doing investment management work were not perceived to be firm leaders. That has changed drastically.”

No kidding. On the public fund side of the equation, there is little doubt as to who leads the pack. Borden Ladner Gervais LLP, where 10 of the firm’s largest national clients are mutual fund managers, is the market leader; so much so that, according to Ontario Securities Commission (OSC) sources, the firm is responsible for upwards to 60 per cent of the mutual fund filings with the Commission.

On the private fund side of the equation, there is again little doubt as to who leads the pack. Torys, with its strong historical roots in Canada’s private capital pools, is the market leader. This unique market duopoly is crystal clear to a highly placed industry source with no connection to either firm. “Torys, and even McCarthys and Oslers, are all more active than Bordens on the private investment side,” he says. “But Borden Ladner Gervais has a real mutual funds group. The firm comes up over and over again on all kinds of issues from the dealer side and the manager side, acting for all kinds of clients from institutions to boutiques.”

What makes the contest so fascinating is that, not-withstanding current market positions, no firm will provide the other with a respite, and secondly, there are so many fronts on which to fight. So many doors to open. Or, perhaps, there are some that should not be opened. Should a firm marshall its resources for high-end, transactional, private sector work which is arguably more creative and lucrative? Or, does it make more sense as a profitable long-term strategy to dominate the massive public sector market? If the latter strategy is pursued, what does this mean in terms of future M&A work? And do we care? Or, given the finite nature of the top legal talent in the field, is there an optimal mix of work from the two sectors that preserves other options? Is our priority domestic markets? Offshore markets for Canadian funds? Canadian markets for offshore funds?

Volume of work notwithstanding, it is a market where the gracious professionalism that normally characterizes relationships between competing law firms can, occasionally, slide off into caustic comments which have all the subtlety of a sledgehammer. Five years ago, Borden Ladner took exception to remarks regarding its funds practice attributed to Patricia Koval at Torys which appeared in an important US publication. “According to the article, our competitor said that we focused on routine aspects of the practice, while they focused on innovative advice,” recalls Borden Ladner’s Paul Findlay.

It is obvious that Torys hit a nerve. Borden Ladner has never forgotten the slight and some partners are clearly of the view that it is now payback time. According to one firm member, speaking off the record: “Torys’ aura is starting to fade rather quickly, even though Marlene Davidge is a very strong lawyer. We have a continuing flow of work from clients who used to retain Torys, and have taken on a much bigger market share. And as for the quality of Borden Ladner’s work, we pride ourselves on giving our clients practical advice. We’re more likely to say to our clients, ‘Here’s your comfort zone.’ ”

Davidge responds forcefully to the criticism: “Yes, I am a walking textbook which means I can give an answer on the spot, but I value that much less than thinking about how to get a project done.” Davidge goes on to add that “different clients want different levels of comfort and service and we respond to what the client wants. It’s as simple as that.”

When asked about the obvious one-upmanship between Torys and Bordens, one insider simply laughs. “Look,” he says, “you have to appreciate that this is a very competitive industry. Trust me, what the law firms say about each other pales in comparison to what the clients say about each other. Both Torys and Borden Ladner have great practices and Marlene Davidge and John Hall are superb lawyers. Marlene draws fire from some quarters because her practice is high-end and extends beyond funds to finance and merger work, where she is also seen at the top. Face it, some people resent the success of others.”

Interestingly, in determining which way the contending firms proceed, one important decision may already have been made. The fund practice group structures of the two principal contenders, Torys and Borden Ladner, are quite different. This may well equip the firms with advantages in some areas while circumscribing their options elsewhere.

Whatever decisions are made, at this point there is certainly a surfeit of work for the magic circle. One senior practitioner recently called on by a client to meet a short deadline declined the work, secure in the knowledge that it was quite unlikely that the client would find someone else, as they threatened to do, capable of acting on such short notice. Sure enough, the client somewhat sheepishly returned with a few days, agreeable to a more elastic deadline.

To call the industry competitive is a massive understatement. It is a rough-and-tumble, mud slinging slugging match where short-fused investors, both public and private, exert enormous pressure. To be sure, asset managers have consistently pulled together an admirable common front in dealings with regulators. But beneath the veneer in what is a closely-knit community, public and private asset managers, along with their financial advisors, lawyers and accountants, are locked in a daily contest to provide new and better versions of the niche products which have become market favorites. RRSP clone funds, capital class funds, hedge funds, multi-class funds, multi-series funds, and other creative investment structures, including sophisticated private placement arrangements, drive the market. And, as one would expect, an enormous importance is attached to innovation. And, as one would further expect, innovation is handsomely rewarded, whether it be financial or legal-related.

“Innovation is the key because it throws off residual benefits for years in this industry,” explains Harold Hands. Mackenzie, who launched the first clone funds with the assistance of Borden Ladner, raised $6 billion dollars in the first 24 months on the market, and continues to have the most assets in such funds of any Canadian manager. “It’s a branding thing,” Hands says. “If you’re first to the market, you’ve got a jump.” According to Rebecca Cowdery, Manager of Investment Funds at the OSC, “The days of the plain vanilla fund are limited.”

So pervasive is the desire to be seen as innovative that all the senior lawyers interviewed for this article went out of their way to note the creative funds they had helped bring to market. However, in an industry where cutting-edge ideas become public knowledge the day the prospectus is filed, ingenuity has a very short shelflife. And it is often difficult to sort out who was first off the mark with what. For example, while Mackenzie and its Borden Ladner team are generally credited with the mainstream advent of foreign clone funds, the National Post’s Jonathan Chevreau calls Global Strategy (represented by Torys before its recent merger with AGF, also a Torys client), “the unsung pioneer of 100 per cent RRSP eligible global funds.” And Linda Currie at Oslers maintains that the Mackenzie clone fund concept had its origins in earlier work done by colleague Andrew McGuffin with the Toronto-Dominion Bank.

Practitioners say that legal fees for product development commonly run to several hundred thousand dollars. For truly innovative products, fees can reach seven figures. Price sensitivity respecting fees is simply not an issue where innovation is concerned. In fact, competition for legal talent is so keen that apparently a number of clients have indicated a willingness to discuss incentive fees related to a new product’s success in the market.

This latter development, i.e. incentive fees, doesn’t surprise Stephen Erlichman at Fasken Martineau DuMoulin LLP. Erlichman has been working with mutual funds since 1982. He is the author of Making It Mutual: Aligning the Interests of Investors and Managers, a report on mutual fund governance released in the summer of 2000 by the OSC on behalf of the Canadian Securities Administrators. “If a product is successful, innovation is worth a hell of a lot of money,” Erlichman observes. “A fund company buying another fund company has to pay 7-91/2 per cent of assets, or between $70 and $95 million dollars for a competitor managing $1 billion. If a smart lawyer and a smart accountant and a smart in-house counsel can develop a new product and raise a billion dollars, it won’t cost the fund anywhere close to $70 million.” Recently, Erlichman headed the legal team that assisted Mackenzie in bringing its new capital class funds to market ($150 million raised in the first four weeks) and is currently assisting New York-based and Toronto-based investment managers in the creation of a unique, closed-end, crossover technology fund.

But there is a catch. Erlichman goes on to add that: “It is compelling to build internally if you can, but not a lot of fund companies are willing to invest the money it takes to do that, so there’s a lot of intellectual capital copiers around.” Copycat products, sometimes with value-added features as creative as the original product, sometimes not, follow closely on the heels of successful products. “I can tell you of instances where the prospectus for the product that copied the original product contained the same typographical errors as the original prospectus,” says one veteran funds lawyer. So, as what was original and unique becomes commonplace overnight, the pressure mounts on the asset managers and their lawyers to, literally, squeeze more toothpaste out of the tube. “The industry watches itself like a hawk, and it spins over to the lawyers,” says Davidge.

And this is why the leading firms in the field are generally so knowledgeable about one another. Like their clients, they watch each other like hawks. The problem is that while it is generally possible to track activity in the public fund market and thus reach conclusions as to the relative standing of firms, any such analysis breaks down in the private markets. The private markets are not merely “private”, they are “extremely private”. Assessing market position here becomes much more anecdotal. Further, it becomes difficult to talk about one firm “leading” or “dominating” the market as there are, in fact, two markets, i.e. public and private, which are as different from each other as apples and oranges. To understand the relative standing of Torys and Bordens, the two heavyweights, one has to understand the origins and nature of their respective practices.

The pioneers of the investment fund and asset management industry—Warren Goldring of AGF Management Ltd., Jim O’Donnell of Mackenzie, Ron Meade of Altamira, Arthur Labatt of Trimark and others—got their start in the 1950s and 1960s. Initially, they managed pension funds or the holdings of high net-worth individuals, later gravitating to public mutual funds. A series of disasters in the 1960s, including the collapse of Bernie Cornfelds’ IOS fund, followed by a decade of poor stock market performance in the 1970s, left the industry moribund—little more than a “cottage industry,” in the words of Harold Hands. But that was to change.

As boomer demographics and the introduction of backend investing (where fund companies pay upfront commission to dealers together with a “trailer fee” of between .25 percent and 1 per cent, regardless of performance, for each year an investor retains assets in the fund, an arrangement that makes it far more profitable for dealers to sell funds than stocks or bonds) made their impact through the 1980s and 1990s, the industry grew spectacularly. “In the early 1970s, there were only six or eight fund companies, each with five or six funds, and a fund company might launch one fund every year or every two years,” says Harold Hands. “By the late eighties, companies were falling all over themselves to launch new products.” It is no surprise, then, that the leaders of Canada’s investment fund and asset management legal practices, including Davidge, Malatest, Hall, Erlichman and Currie, were all called to the bar between 1979 and 1983. They were in the right place at the right time. The exception is David Rounthwaite at McCarthys, who was called in 1976.

The entry of Torys into the mutual fund industry is closely associated with James Baillie, Q.C., the nature of Baillie’s client base, and the firm’s expertise in securities law. In 1969, Baillie was a co-author of The Canadian Committee Report, which played a significant role in shaping the legislative regime governing the industry. From her first year in practice at Torys, Marlene Davidge was working on AGF files. “There was hardly any volume of mutual fund work when I started at Torys, but in a lot of ways, I do today exactly what I did 21 years ago,” Davidge observes. “It used to be that the Canadian economy was dominated by families like the Thomsons and the Bronfmans, whom the firm represented. Now, the huge pools of capital are in the pension funds, the mutual funds and the private money managers. It’s not a huge sea change acting for them.”

Davidge’s impressive track record across a number of practice areas has made her the most high-profile lawyer in the field and, arguably, the most versatile. “Marlene has vast knowledge in so many different areas, such as corporate law, pensions, governance, securities, and M&A, to name but a few,” says Judy Goldring at AGF. Davidge’s multidisciplinary reputation befits a senior partner in a firm that markets itself as a high-end, transaction-oriented, value-added practice. “Our asset management practice is part and parcel of our market position as a top-end firm in a wide range of high-end transactions, and that’s the area we target,” Davidge says. “In the managed assets area, there is a layer of work that is more repetitive, so if you’re going to measure the size of a practice by the number of renewal prospectuses and dealer registrations, we won’t rank as the largest.”

Instead, Davidge says, Torys has positioned itself to compete for the big-ticket domestic and foreign deals that involve sophisticated structuring and advice, particularly where derivatives and hedge funds are involved; for the foreign pools of money, particularly American funds, some with assets exceeding the total portfolio managed by all IFIC members; and for the work emerging from the globalization of the industry.

To that end, Davidge is constantly on the move. AGF, her primary mutual fund client, is well-known for its global ambitions. Davidge also points to Torys’ sophisticated work in the derivatives area for the Royal Bank; to taking Trimark (later absorbed by AIM) public; to acting for the underwriters when C.I. Mutual Funds went public; to her work on behalf of various Merrill Lynch mutual funds in the realization of their 19.9 per cent interest in downtown Toronto’s First Canadian Place; to her representation of “leading lenders” in debt-based private investment fund transactions; and to her role in a fund investment in a telecommunications system for the Republic of Kazakhstan.

Partner Patricia Koval was involved in the creation of the exchange-traded funds pioneered by Barclay’s Bank which is the current rage on the Street, while Karen Malatest has advised Merrill Lynch on a variety of fund mergers. On the tax side, Lucia ten Kortenaar’s accomplishments include pioneering the tax effective rebate known as the management fee distribution; being among the first tax lawyers to work on multi-class investment funds; and persuading tax authorities to allow mutual fund service providers to broaden the range of services they could make available to offshore funds.

Consistent with the approach that Torys has taken to commercial practice, Davidge considers herself “a generalist in securities law, but one with specialty spikes.” One of those spikes has resulted in a topnotch reputation as an M&A specialist. In that area, Davidge’s credits include acting on AGF’s failed bid for Trimark, AGF’s acquisition of 20/20 Funds, and AGF’s acquisition of Magna Vista, a fund servicing high-net worth investors. Davidge also acted on the Abitibi-Stone merger, where the shareholder base of both companies included significant positions by private money managers. “The fact that I understand the mentality of private money managers, and what they’re looking for, served both myself and my clients well on that transaction,” she says. Torys currently represents BMO Nesbitt Burns and RBC Dominion Securities in Altamira’s proposed $200-250 million initial public offering. Needless to say, Davidge’s wide experience positions her well in a market viewed by many as about to enter a period of significant merger activity.

Karen Malatest provides a graphic illustration of how Torys approaches the industry: “We don’t think of investment funds and asset management as an area of law, but as an industry to which we apply different areas of the law. Doing an M&A deal in this industry is no different than acting on the acquisition of a doughnut chain, because it involves the same sorts of skills. The difference we offer is an industry expertise that allows us to bring value to the transaction.” It is this thinking that forms the basis of an historical aversion to formal practice groups in favor of a more generalized “client team” approach.

Torys, along with most firms that have significant funds practices, has lost lawyers to the industry. Warren Collier left to go in-house as did Lewis Dubrofsky. Arguably, the most significant departure has been that of mutual fund tax expert Judith Harris, who joined Oslers. At Oslers, Martin Guest left to go in-house with Fidelity. At Borden Ladner, Michael Killeen and Elizabeth King left to go in-house. At McCarthys, Stephen Griggs went in-house.

The end result is a perception in some quarters that a number of firms, such as Torys and Oslers, are thin on the ground. On the other hand, if the strategic gambit is high-end, high-value, transactional work, then a high body count may not have the critical importance it would otherwise have.

Depth is not an issue at Borden Ladner Gervais LLP. The firm has assembled a remarkable group and established a powerhouse practice. Some 24 lawyers, ranging in seniority from rainmaker and Toronto Managing Partner John Warren to junior associates, represent as primary counsel 22 of the 66 mutual fund managers on the IFIC membership list. This client roster includes such heavyweights as the AIM Funds, Fidelity, Mackenzie, C.I., and Templeton Management Limited, five of the 10 largest funds in Canada. Bordens also boasts a significant investment practice in Ottawa, where the primary clients are MD Management Limited, ranked 14th by the IFIC, and Fiducie Desjardins, ranked 24th. In Vancouver, the firm represents 15th-ranked Phillips Hager & North Ltd. and 26th ranked HSBC, the leading mutual fund managers in Western Canada. The firm’s market presence is so strong, says partner Paul Findlay, that “when we’re not acting for the funds, we’re acting for the banks as counterparties.”

“One of the advantages we have in being so well represented in the industry,” says John Hall, “is that we’ve been in on most of the innovations, so we’re plugged into industry trends and don’t have to reinvent the wheel and charge big fees every time we’re asked to do something.” Lisa Negraiff, Assistant Vice-President, Legal, at AIM Funds agrees. “I’ve never run into any firm that, as a whole, knows the legalities of mutual funds as well as Borden Ladner. The other firms’ senior people have just as much expertise, but the people they bring in on files have to get up to speed.”

A number of corporate counsel point to the different practice philosophies of Torys and Bordens, i.e. well-rounded corporate generalists vs. specialists, as being at the heart of the issue. One corporate counsel, who has worked extensively with both firms and requested anonymity, framed the matter this way: “There is more depth at Bordens than at Torys. Bordens has a group of lawyers devoted exclusively to the investment fund industry, including junior lawyers. Torys tries to get broad experience for their lawyers, but that means they move around a lot—something that may not always sit well with investment fund groups.” Adds Martin Guest at Fidelity: “We use John Hall at Borden Ladner in many different ways. There are times when we need external expertise, times where we just need resources to handle the workload, and times when Bordens are better equipped than we are internally to handle certain tasks because they have the staff and scale available.”

Bordens’ success in mutual funds is a story of internal growth and judicious merger. On the Borden & Elliot side, the history goes back to 1957, when American fund distributor Vance Sanders hired corporate finance lawyer Richard Meech, Q.C., as counsel. By the end of the 1960s, Meech represented 10 of the 12 largest funds in Canada, even creating the first piggyback fund for the Nassau-based Dreyfuss group. The US-based part of the practice declined during the poor markets of the 1970s and the introduction of a regulatory regime requiring funds to concentrate their investments in Canada. Nevertheless, when one door closes, another opens. Meech was asked to act as Chair of the Mutual Fund Committee of the Business Law Section of the International Bar Association (IBA), eventually becoming its President for an eight-year term starting in 1972. His IBA connections made him an important rainmaker in the renaissance of Bordens mutual fund practice, which he developed with John Warren and Lynn McGrade, who is the current secretary of the IBA’s Mutual Fund Committee.

During this period, at what was then Day Wilson Campbell, Harold Hands was building a significant practice based on his representation of Mackenzie, which he acted for from inception. “Eventually, I was doing work for eight mutual fund companies,” he recalls. “It was regular work, a very nice specialty to be involved in.” When Hands joined Mackenzie in-house, John Hall inherited his practice. Day Wilson Campbell became Houlden Day Wilson. When that firm collapsed in 1996, 16 corporate-side lawyers, including Hall, joined Bordens. “John Warren, one the managing partners in Borden & Elliot’s Toronto office, was doing a lot of mutual fund work too, so it was a very nice fit,” Hands notes.

The combination of the two practice groups, Hall says, put Bordens in a position to challenge Torys for market dominance. And, he insists, the firm’s ascendance is not just a matter of doing volume work such as renewals. Among the high-end transactions on which Bordens has acted, Hall notes, are AIC’s creation of the first split share transaction structured on a mutual fund; MD Realty Fund’s merger with the Canadian Real Estate Investment Trust to form what was then Canada’s largest closed-end real estate investment trust; Scudder Kemper’s partnership with Maxxum Fund Management; AMVESCAP plc’s acquisition of G.T. Global; and Mackenzie’s financial reorganization of all its public limited partnership into a master limited partnership listed on the Toronto Stock Exchange. “And our growth on the private investment side has been astronomical as well,” Hall adds.

Bordens also enjoys a strong and privileged role in the governance of the industry. Apart from its representation on the Securities Advisory Committee of the OSC, the firm acts as counsel to the Mutual Funds Dealers Association (MFDA), about to be recognized as the self-regulatory organization for mutual fund dealers, and to the Investment Dealers Association of Canada, the securities industry’s national self-regulatory organization. Borden Ladner has also regularly acted as counsel to the IFIC, and represented the Canadian Depository for Securities since it was organized.

But there are problems, or at least perceived problems. Hall is concerned that his group gets insufficient recognition for the quality and depth of talent on the tax side of the practice. Tax can be of pivotal importance in structuring an innovative fund vehicle. The firm has had a “recognition” problem in tax ever since Laura White, who came with the Holden Day group, left to join Pricewaterhouse- Coopers several years ago. White is an experienced, highly regarded investment fund tax lawyer whose only real counterpart, in the eyes of many in the industry, is Lucia ten Kortenaar at Torys. The “optics” exasperate Hall, who rightly points to a number of well regarded tax lawyers who work with the funds group.

A further factor which may impact on Bordens market share is the growth of in-house legal departments among the larger investment fund managers. “When I joined Mackenzie I was probably the only in-house lawyer in the industry,” says Harold Hands. “Now we alone have four. Just about everyone else has two or three.” And, as the departures from Bordens, Torys, McCarthys, and others illustrate, the industry is ever watchful for good in-house candidates from private practice. “Funds are beefing up on hiring lawyers and paralegals and compliance officers,” Stephen Erlichman notes, “and they’re doing more and more of the day-to-day work in-house.”

Overshadowing whatever “recognition” problems Bordens may have in tax, or future concerns about work going in-house, towers one singularly impressive fact: the firm has progressively added important new clients to its roster over the past two years to the point that it is principal counsel to one-third of the funds that make up the IFIC. And frequently, this has been at the expense of Torys.

One must, however, be careful in assessing what this redistribution in market share means. Leading tax practitioner Laura White, formerly at Bordens and now with PricewaterhouseCoopers, puts the following spin on it. “The people at Torys are great advisers, but their hold on the industry has slipped considerably,” she says. “I can’t say whether that happened by choice or because Borden Ladner got really good and really big. But I can’t help but wonder if the mutual industry isn’t considered enough of a prestige industry, enough of a blueblood industry, for Torys.”

Others provide a less contentious explanation. According to one senior practitioner with a firm that competes with both Torys and Bordens, all it really means is that Bordens is a