Torys: Evolution of an Icon

<i>Torys LLP has recently faces media speculation about the movement of several partners in its Toronto and New York offices and its involvement in the trial of Lord Conrad Black. But with its loyal blue-chip clients and continued ranking as one of Toronto's most prestigious large law firms, Torys refutes the naysayers</i> <br/> <br/><p>If Torys LLP is on the way down, Corporate Canada hasn't heard.</p>
Torys: Evolution of an Icon
Torys LLP has recently faces media speculation about the movement of several partners in its Toronto and New York offices and its involvement in the trial of Lord Conrad Black. But with its loyal blue-chip clients and continued ranking as one of Toronto's most prestigious large law firms, Torys refutes the naysayers

If Torys LLP is on the way down, Corporate Canada hasn't heard.

For some time now, major Canadian media sources have been speculating about the firm's troubles. These include a first-time absence from the (2006) M&A league tables; the downsizing of the New York office, including most recently the departure of managing partner Trip Dorkey; the loss of 10 partners from the Toronto office; and Torys' involvement in the trial of Lord Conrad Black.

But even as the cacophony persisted in mid-April, a blue-chip group composed of the Canada Pension Plan Investment Board (CPPIB), the Caisse de dépot et placement du Québec, Canada's Public Sector Pension Investment Board and Kohlberg Kravis Roberts and Co. (KKR) announced “discussions” aimed at taking BCE—the publicly traded, Quebec-based telecommunications giant—private.

The group's exemplary makeup of Canadian and Quebec-based pension funds made it a favourite for what could turn out to be a $40 billion merger, the largest in Canadian history. The legal advisors for these backbones of Corporate Canada? None other than Torys.

“We chose our counsel very carefully when we started to talk about BCE in August 2006,” says a senior consortium executive. “My life and the future of our organization depended on our assessment of the firm's reputation. If we trusted Torys with this, we'd trust them with anything.”

It's as if the media moons had finally aligned for the firm. Several weeks earlier, Torys ended its longstanding refusal to respond to the conjecture by granting Lexpert unprecedented access to its partners, its clients and internal firm documents.

“We've had a challenging time adapting to the interplay of lawyers and the media,” says Les Viner, the firm's managing partner. “We've always tried to be lawyers' lawyers dedicated to the client. Interacting with media is not something that's been part of our historic game plan.”

Given their lack of experience, however, Torys' timing couldn't have been better: the BCE transaction was but one of five $1 billion deals that crystallized for Torys that week, including a mandate for Abbott Laboratories in the US$8.13 billion sale of its in-vitro diagnostics and point-of-care divisions to General Electric.

April, it seemed, just couldn't have been more peachy. But it was.

Thomson Financial and Bloomberg both released their 2007 Q1 legal advisory league tables (which of course does not include transactions announced in April). Thomson Financial ranked Torys fourth in volume of announced Canadian deals, while Bloomberg gave the firm fifth place. In the Thomson study, Torys' 23.3 per cent market share moved it up 12 spots from its 16th place ranking for the same period the previous year.

Torys' international brand also remains intact. The firm made Bloomberg's global top 20 in deal volume for cross-border, Asia Pacific and Australia-New Zealand announced deals in Q1.

It defies reason that a firm rumoured to be in freefall and perhaps on the brink of dissolution could rebound so dramatically in a few short weeks: after all, the Black media circus is still very much in the public eye. The more likely explanation, buttressed by the early 2007 results, is that Torys' absence from the 2006 media tables are an aberration caused by the timing of deals, mandates for losing bidders in an increasingly hostile M&A environment and an unfortunate run of client conflicts. In the normal course, for example, Torys would have represented Brookfield in its US$4.8 billion purchase of Trizec, but was conflicted out. Finally, 2006 featured a host of multi-billion dollar mining deals in which Torys did not participate, largely because—apart from its representation of Sherritt International Corporation—it has little industry expertise or M&A experience in the area.

“I'm not sure the press understands that you don't show up in the league tables even if your clients finish second in a bidding war 10 times in a row,” notes Torys partner Pat Koval.

Still, the longstanding and, to some extent, overlapping circumstances that have been feeding the speculation about Torys continue to provide grist for the mill. Close examination, however, reveals that though the mill may be spewing smoke, nothing's on fire.


It may be that Torys is paying the price for having been so prominent—and perhaps so media-unfriendly—for so long. Still, Torys is a young firm. Its history dates back about 55 years, and began in earnest when the Tory twins, Jim and John, then in their 20s, assumed the firm's mantle from their father.

“It wasn't a book of business kind of firm,” Viner says. “Because Jim and John were so young, they had to learn quickly and rely on the other members of the firm.”

From that grew Torys' collaborative approach to the practice of law and a deeply corresponding culture. “Our culture defines who we are and what our strategy is,” Viner says. “We depend on deep and loyal client relationships that extend across a broad range of practice areas and that reach deep into the ranks of the firm, so that we can pass on these relationships from decade to decade. This requires us to act in a counsel advisory role in which partnering with clients is core.”

Consequently, the firm has eschewed the celebrity culture and “franchise players” along the lines of Clay Horner at Osler, Hoskin & Harcourt LLP.

“We're in the business of servicing clients, not in the business of creating rock stars,” Viner says. “We have lots of relatively unknown people doing billion-dollar deals. Nobody knows about them because we focus on the clients, not on the newspapers. Quality and collaboration, not celebrity, remains the key to our brand strength.”

This mindset also helps to explain why the firm is disinclined to pursue flavour-of-the-day practice areas. “We have never tried to develop areas of practice simply because they're hot,” Viner says. “We do so only after there is a demonstrated need from our clients. And because so much of our work comes from core clients, we have somewhat lower highs than most of our competitors and somewhat higher lows.”

The low highs mean that Torys will likely never be the most profitable large firm in Toronto. “Nor do we want to be,” says a senior source at the firm.

Indeed, until the firm expanded to New York, its profitability was believed to hover near the average for major firms in Toronto. (Beth DeMerchant, who has retired from Torys, recently testified in the Black trial that she was earning between $600,000 and $900,000 in 2000 as a mid-level partner who had been on the executive committee at Torys.)

Internal financial documents show that, since then, the firm has consistently ranked among the four most profitable large law firms in the Toronto market, during which time it has made up more than half the gap between itself and the top-ranked firm. This is significant because, accordingly, the four most profitable firms have for the last few years been in a group by themselves: there is a considerable drop-off in profitability between the fourth-ranked firm and the fifth-ranked firm, and between the fifth-ranked firm and the sixth-ranked firm.

Indeed, Viner is quick to point out that the spate of deals in April arose “from relationships that have come from years of working with clients and generally not from out-of-the-blue phone calls.” The approach has paid off: Torys' internal documents reveal that revenue from a core group of 22 clients more than doubled in the last decade.


To be sure, it isn't a completely pretty picture. In recent months, Canadian media have focused on the videotaped testimony of DeMerchant and Darren Sukonick (a securities lawyer with Torys) at Black's trial. Torys represented Hollinger International on the sale of its Canadian newspapers and a 50 per cent interest in the National Post to CanWest Global Communications Corp. in 2000. US prosecutors allege that Black and his co-defendants misled Hollinger's audit committee and wrongfully received about $80 million in exchange for a non-compete agreement.

Two counts of fraud in the multi-count indictment against Black flow from these transactions and the non-competes. An additional charge accuses the defendants of wiring money across the border in connection with the deal. Despite the fact, then, that only three of 17 charges involve transactions in which Torys represented Hollinger, the publicity has been daunting.

Torys has had to endure questions about its lawyers' refusal to give evidence in person in Chicago, allegations of perjury in the cross-examination of Sukonick, and admissions by DeMerchant that she—and the firm—“dropped the ball” and “violated the most basic rule of tax law, which is to get help” when they mistakenly advised Hollinger not to make public the $80 million paid to company executives.

DeMerchant's testimony is particularly unsettling: what little Torys has said throughout this piece focuses on the firm's belief that it had done nothing wrong. When the firm paid US$30.3 million to Hollinger to settle a civil claim, it maintained its “no liability” position. But even after DeMerchant's testimony, the firm seems to have difficulty coming to grips with the substantive issues, preferring to blame the press for its troubles.

“We looked through the Hollinger file in detail and decided that no mistakes had been made,” says Peter Jewett, who's been with the firm for 35 years. “If we made a mistake, it was the way we handled the press coverage. I guess we had an unrealistic feeling that Torys would never get questioned on whether we had done something wrong.”

It's almost as if accusing Torys of making a professional error of judgment is tantamount to attacking the firm's integrity—and nobody has ever suggested any such thing. Somehow, however, the firm still doesn't seem to get it. Underlying this is a heightened sense of wounded professionalism and an equally acute sense of loyalty to partners. Indeed, loyalty permeates the firm at all levels: average non-lawyer staff tenure is 15 years.

“The Hollinger matter is a distracting heartbreaker, and a very high-profile one at that,” says a senior source at Torys. “But you're talking about colleagues whom we know to be people of integrity and who have worked their butts off, so I'll be damned if we throw them to the wolves. That's not our culture.”

Whether or not this is misplaced in the circumstances is open to question. But what's clear is that Torys' reputation appears unsullied among the people who matter most—the clients. An impressive lot agreed to speak with Lexpert.

“I believe the people at Torys have good judgment and I believe that they marshal the troops quickly and focus on me as a client when I have an issue that goes across many legal disciplines,” says Jim Estey, CEO of UBS Securities Canada Inc. “There are many, many law firms that can do a very capable job, but I am comfortable with this firm. My personality fits with them and I have found their judgment sound. And unlike Torys, other law firms don't ask us how they're doing or how they can do things better.”

Denis Turcotte, president and CEO of Algoma Steel Inc., who has been a Torys client since the company's reorganization in 2002, addresses the Hollinger issue head-on. “The publicity isn't good, but it's to Torys' credit that they haven't put the heads of the lawyers involved on a stake at the front gate,” he says. “For a client, though, it's all about the people with whom you're dealing, and the people I deal with at Torys are as good as they come—and I've dealt with a lot of A-tier firms.”

Turcotte says that if the recently announced sale of the company goes through, he'll recommend that the new owners keep Torys on as their legal advisor.

Likewise, Mike Norris, deputy chairman at RBC Capital Markets, and Frank Monteleone, vice-president and general counsel at Pfizer Canada Inc., say the Hollinger affair has had “no effect” and made “no impression” on their historic relationships with Torys.

Mark Wiseman, senior VP for private investment at CPPIB, and formerly at Sullivan & Cromwell LLP in New York, goes so far as to call press coverage of Torys' involvement in the Hollinger affair a “raw deal.”

“When I want to put CPPIB into a safe pair of hands, I still reach out to Torys the greatest percentage of the time,” he says.

Wiseman is also of the “there but for the grace of God go I” school, a view taken almost unanimously by the host of off-the-record senior partners at major firms whose opinions have been sought out by the media. But that shouldn't surprise anyone: it turns out that CLLAS—an elite group of 14 Toronto-based firms comprising more than 5,000 lawyers who have banded together to incorporate a reciprocal insurance exchange known as the Canadian Lawyers Liability Assurance Society—paid out at least two other claims in the $30-million range on behalf of other members in 2006.

No one's made a great fuss about those claims. No one's raising questions about the affected law firms' viability or future. Yet it seems that every move Torys makes has attracted adverse publicity in the recent past.

“When we changed our internal lunch menu, we got a full column in a national newspaper with the ridiculous speculation that we're charging for coffee,” says a senior source at Torys.
Wiseman may be right: that does sound like a raw deal.


Hollinger's sale to CanWest took place in 2000, about the time that Torys merged with Haythe & Curley in New York. But it's unlikely that even a Hollywood producer schooled in disaster scenarios could have come up with a more inauspicious debut for the merger. Thomas Haythe, the partner who lent his name to the newly merged firm, chose the party celebrating the merger to vent his lascivious tendencies, which led to charges of sexual harassment. To Torys' credit, Haythe was quickly ousted and the merged firm was renamed Torys LLP.

Still, it was a bad start, and it reverberated in the New York office.

“There was fallout and divided loyalties within the New York group over Haythe's departure,” says Koval. “It contributed to a degree of turnover that no one expected.”

Quite apart from the Haythe affair, however, there's an argument that Torys' surprise over the turnover revealed a disturbing naiveté about New York's legal market. Today, the Haythe name is gone and there are only 50 lawyers occupying one floor in Manhattan compared to the 75 lawyers who occupied two floors when the firms merged.

Viner is quick to admit that the firm underestimated the competitiveness of the New York domestic legal market and overestimated its ability to draw the US work of important Canadian clients away from New York firms with whom these clients had established relationships.

“We had our eyes on the US domestic practice and we were too focused on the head count,” Viner concedes. “We were insufficiently focused on growing the cross-border practice by way of the collaboration and integration that has always worked for us.”

All this may be nice by way of mea culpa. But the fact remains that only about a dozen of the original lawyers on the Haythe & Curley roster are still with Torys. Jewett, a senior partner involved in the merger decision, argues that this reflects a successful realignment strategy focused on the cross-border practice.

“What we thought six or seven years ago is obsolete now,” Jewett says. “It turns out that the real strength of the New York office is in the cross-border practice.”

This firm's cross-border seamlessness, Jewett adds, allows quick turnaround time on cross-border issues. It has also allowed Torys to keep the work of Canadian clients that it might have lost entirely. Several years ago, for example, when Petro-Canada consolidated its Canadian M&A and corporate finance work, handing it all to Fraser Milner Casgrain LLP, it also began sending its substantial US work to Torys' New York office.


Skeptics might argue that a few specific examples do not a successful strategy make. What they wouldn't know is that Torys' internal statistics reveal that 50 of its 100 top Canadian clients have generated substantial fees for New York. Indeed, the New York office generates 80 per cent of the firm's work for the Ontario Teachers' Pension Plan (Teachers), an important client.

What is also generally unknown is that the Haythe & Curley lawyers who remained, like Jay Romagnoli and Andy Beck, were central to Torys' cross-border strategy and core practice. Romagnoli is a private equity specialist and Beck a securities and corporate finance type.

“At some level it's humorous how much attention the New York turnover gets in Canada,” Romagnoli says. “People leave US firms all the time and no one pays any attention to it.”

Mike Amm, a Toronto-based junior partner who worked in the New York office for a time following the merger, saw the initial upheaval first-hand. “I perceived the departures as arising from a certain lack of fit that's going to take place whenever two firms merge,” he says. “But I still talk every day to the core corporate types that I was working with then, people like Jay and Andy. I don't really care whether there are 40 or 50 lawyers left as long as they're core to the operation, and the ones who stayed certainly were. Many of the people we lost in New York, like the municipal bond group, didn't have a cross-border dimension and/or were low-margin practices.”

Amm points to Torys' representation of India's Hindalco Industries in its recent US$6 billion purchase of Novelis Inc. as evidence of what a US office means to the firm. Although Novelis is incorporated in Canada, a minority of its assets are in North American and its de facto head office is in Atlanta.

“We led the deal for Hindalco, coordinating all the legal work in Canada, the US, Europe, Brazil, Malaysia and Korea,” he says. “On the other side of the table, King & Spalding of Atlanta was lead counsel to Novelis, with Osler Hoskin doing the Canadian work. The capabilities of our New York office allowed us to play that lead role. So if you're looking at the value of the New York office, you have to factor in the work we wouldn't otherwise get.”


Torys does not disseminate separate financial statements for New York, so it's difficult to ascertain whether the office is profitable. What Torys does reveal is that about one-half of New York revenues originate with Canadian clients. This makes it unlikely that the New York office is profitable solely on the strength of what its resident practitioners draw to the firm.

In an era of national and global law firms, however, that may be beside the point: for example, it's not known how much work the Toronto office derives from the rainmaking of New York practitioners or their mere existence. What is known is that these are substantial factors and their significance is growing.

“New York's profitability can't be measured simply by comparing New York billings with New York expenses,” Koval says.

By way of example, Torys' Toronto office now acts for New York-based Third Avenue Management (TAM), which administers some US$28 billion in investments and made a C$129 million partial tender offer in 2006 for Catalyst Paper Corporation.

“Torys is our go-to firm in Canada partly because it's very handy that they have an office here in New York,” says Steve Feldman, TAM's associate general counsel. “Their quality is right up there with the best firms in the US. Joris Hogan [a New York partner] and Phil Brown [a Toronto partner] are a great team and provide seamless service between the two offices.”

Hogan, a smooth former West Pointer who spent five years in the US Army before he went to law school, joined Torys after 25 years at Milbank, Tweed, Hadley & McCloy LLP, a 550-lawyer Manhattan-based operation with offices around the world. There he helped set up the firm's M&A department and practised extensively in the cross-border area.

Not only is Hogan nonplussed by the history of turnover in the New York office, he sings the praises of the firm's collaborative approach.

“Nobody treats New York like a branch office,” he says. “Three of the seven members of the firm's executive committee are from the New York office, and that hasn't changed since the merger took effect.” The rest of the committee consists of three Toronto partners and the managing partner.

The work flow goes both ways. “The Canadian partners took me to their top clients, and one day after we called on Teachers, they asked me to represent them on an infrastructure investment in the US,” Hogan recalls.

Generally speaking, the merger has elevated the practices of the New York partners who remain.

“Haythe & Curley didn't have the depth of blue-chip clients that Torys does, but we now have the opportunity to get in on the bigger deals,” says Romagnoli. “The first transaction I did after the merger was Thomson's US$2.5 billion sale of newspaper assets in this country. The type of loyalty that Torys breeds in its clients has really ramped up my practice.”


To be sure, difficulties remain. Anxious to maintain its appeal to top graduates and associates but lacking a top-tier American practice and a corresponding fee scale, Torys has nonetheless chosen to match the US$160,000 in salaries that the top American firms have decided to pay their first-year associates. Osler Hoskin and Davies Ward Phillips & Vineberg LLP, each with offices of about 20 lawyers in New York, have taken similar steps, but their exposure is considerably less. “We don't have the capacity to raise associates' billing rates by the 30 per cent that salaries have gone up recently,” says a senior source at Torys.

At the same time, the prospects for growth in US-related deals with no Canadian component are unclear: the firm ranked 20th, behind both McCarthy Tétrault LLP (4th) and Blake, Cassels & Graydon LLP (12th) in Bloomberg's rankings of law firms acting for principals in all US-announced deals by volume in 2007 Q1.

McCarthy Tétrault, which has no US office, and Blakes, which has only small offices in New York and Chicago, also made the top 20 on the same-period rankings of law firms that had any involvement on US-announced deals; they also appeared on Bloomberg's top 20 for global announced deals. Torys did not appear on either of the last two rankings.

Still, Koval says she's satisfied with New York's progress.

“We were too ambitious at the beginning,” she says. “But over the years we've created a culture where clients who don't have strong connections in New York routinely expect that we'll do their US work. I would be really sorry if we didn't have an office there.”

The likelihood is that Torys will have a New York presence for the foreseeable future. The firm has stayed with the tour through a trying nine years. There's no indication that it will abandon ship now. As demonstrated by the New York office of Davies Ward, which required considerable retooling after the merger of what are now the firm's Toronto and Montreal offices, there's virtue in patience—even in the fast-moving Big Apple.

What's frequently forgotten about Torys is that when major Toronto law firms began poaching about 10 years ago, few partners left Torys. By way of comparison, then, the departure of 10 partners from the firm in the last few years takes on the appearance of a refugee movement.

But close analysis reveals a different story. And that story is that Torys' core corporate practice has not been suffering from defections to other firms. For all Bennett Jones LLP's aggressiveness in picking off six Tory partners, not a single one of them goes to the heart of Torys' core practice.

CPPIB's Wiseman, for example, says that none of the lawyers with whom his organization works—“and that's a fair proportion of the firm”—has left Torys.

It is true that corporate star Brian Davis left for the National Bank in 2005. But J.P. Bisnaire, a heavyweight at Davies Ward, had left his firm for Manulife some time earlier and no one thought that was the end of Davies as we know it. It's also true that Torys partner Jim Turner joined the Ontario Securities Commission, but it's hard to make much of a path well-travelled by such luminaries as Davies Ward alumnus David Brown, who became the OSC's chairman before returning to the firm.

The closest thing to a core departure to another firm may have been Geoff Dyer's move to Bennett Jones. But Dyer, who was approaching 60 and tended to work on personal tax and estate matters, was not an integral part of Torys' M&A teams. Well-informed sources in the legal community say he left for Bennett Jones primarily to take advantage of a pension plan that worked to his financial advantage—and took his former partners' heartfelt best wishes with him.

But the loss of Carolyn Naiman to Blakes' competition group certainly hurt, as did the loss of Wendy Gross's outsourcing competency.

“Gabe Takach created our outsourcing practice and did huge outsourcings for the likes of the Post Office and Petro Canada,” explains Jewett. “Wendy came in to support an established practice in which many of the files were for longstanding corporate clients. When she left, Gabe had retired, but she didn't take the clients with her. So we had the work, but no one to service it, which is why we lured Gabe out of retirement.”

Some on the street have it that Torys simply couldn't match the salaries offered to Naiman and Gross. Not much is known about Naiman's reasons for leaving, but Blakes' powerful competition group seems incentive enough in itself. The same holds true for Gross, who was undoubtedly attracted by McCarthy Tétrault's large outsourcing practice.

It is the case that money was part of the attraction for Gross. Reliable sources say McCarthy Tétrault offered $100,000 to $200,000 more than Torys was willing to pay. The emphasis is on “willing”: as Torys remains one of Toronto's most profitable firms, it's unlikely that it wasn't able to match the ante, more likely that it wasn't willing to do so. And considering the relative importance of outsourcing to the firms, that's not surprising.

“People who are recruiting can make a big splashy offer because they're only hiring one person,” notes a senior source at Torys. “But the firm from whom the person is being hired has to deal with the effect that matching the offer has on the partnership as a whole.”

Indeed, sources close to Gross say that she still lauds Torys as “a great place to work with a great sense of collegiality where people are viewed less as commodities and more as individuals than in larger firms.”

Gross also reportedly lauds Torys' “pride in the brand and the firm's continuing view that law is still a profession and not strictly a business that you run only for the bottom line.” She apparently continues to marvel at the “incredible loyalty there and the many people who have turned down huge bumps in compensation to stay at Torys.”

There's also an argument that it's the firms with holes to fill that are recruiting aggressively at the top end. “Osler Hoskin, Stikeman Elliott [LLP], and Davies haven't taken a run at us,” says a Torys source. “But Bennett Jones sure made a lot of noise about the hires.”

Several days before she left Torys, Gross also made a lot of noise by posing for the National Post to publicize her move to McCarthy Tétrault.

A great deal of noise also followed Barry Reiter's move to Bennett Jones. This may be because an uncharacteristic, unseemly and protracted battle over clients attended the departure. It may also be because Reiter took several colleagues with him.

Reiter is a corporate lawyer whose practice concentrates on the “new economy.” But what's really surprising is that he didn't leave earlier. His entrepreneurial roster of clients could not have been the best fit with a Torys practice concentrated on the blue chips. Bennett Jones' burgeoning Toronto office seems a much more natural association. Indeed, sources close to Reiter say that he wasn't unhappy at Torys at all until Bennett Jones proactively recruited him.

However that may be, Hogan notes that most of the departures were not core corporate types involved in the cross-border praactice. “The departures to Bennett Jones in particular have had no meaningful impact on the work in New York,” he says.

Whether limiting the damage is good enough to sustain a prosperous future for a 300-lawyer firm is a dubious proposition. The evidence suggests, however, that despite the adversity of the past decade, the firm has responded well to its challenges.

In an era where senior lateral hires have become important building blocks for Canadian law firms, there has been a notable absence of such hires at Torys in the last few years. But there's a case to be made that Torys has been ahead of the curve.

“In the last five to 10 years, we have recognized the need to diversify our client base from the high concentration in financial services,” Viner says. “We looked at practice areas where our clients needed services we weren't providing, and it led us to establish the New York office and build practices in areas like intellectual property [IP], real estate, energy and infrastructure. Companies in life sciences, pharmaceuticals and health care are now important clients.”

In the IP and life sciences area, Torys' approach focused on the collaborative.

“We couldn't be all things to all people, so we decided that our niche was in a corporate approach to IP as opposed to the scientific approach that boutiques take,” Viner says. “We started looking for scientists who were lawyers with business sense, and we have lots of Ph.D.s here now. But they're the type of people whom our business lawyers are proud to introduce to their business clients.”

When Ernst & Young's multidisciplinary foray at Donahue LLP folded, Viner brought Conor McCourt and Eileen McMahon on board. Andy Shaughnessy and Peter Wilcox joined from Ogilvy Renault LLP. The firm also added Robin Coster from Bereskin & Parr and Kamleh Nicola from Sim Hughes Ashton & McKay LLP. The IP and life sciences group now has about 30 members.

“I came to Torys because it was the only firm that didn't give me the sentiment that I would be on call for the corporate department,” McMahon says. “We've had a synergistic relationship with the corporate department and the litigation department.”

Following the trend in the US, Corporate Canada had started looking beyond IP expertise to pure advocacy strength in the litigation teams dealing with their patents. With the likes of Sheila Block, John Laskin, Trisha Jackson and Michael Penny in-house, Torys has no shortage of strength in that area. Individuals like McCourt provided regulatory backup; others like Shaughnessy with their specific IP litigation experience rounded out the team.

Today, Pfizer ranks in the top echelon of Torys' clients and McMahon is one of the firm's top earners.

“Over the last seven or eight years, Torys has become one of our go-to firms with respect to our more difficult patent litigation,” says Pfizer's Monteleone. “They have proven themselves with sound advice, superb depth and outstanding research on the most complex cases.”

Similarly, Torys' deep relationships with underwriters and banks provided important synergies for the emerging life sciences companies. Conversely, the expertise of hires like Coster—who advised Canadian financial institutions on their switch to electronic cheque-processing systems—allowed Torys to capture high-profile new economy work from their existing client pool.

“Whether it's litigation or corporate work, it isn't Andy Shaughnessy or Robin Coster or Eileen McMahon who are the individual builders,” Shaughnessy says. “It's all about the Torys platform.”


Torys has been equally successful with its lateral hires in the real estate and infrastructure area. The firm recruited Paul Kennedy, Jim Lawson (who has since left to join a client), David Dell and Sabrina Gherbaz from Davies Ward (without a great deal of noise, either from Torys or the press). In just a few short years, the team has captured mandates on four of Canada's top 10 infrastructure projects in 2006, as compiled by ReNew magazine, including a retainer on the largest project, the $4.25 billion refurbishment of the Bruce Nuclear Power Station.

Again, Dell attributes the group's success to the Torys culture.

“There's an atmosphere of mutual respect, tolerance and diversity where people are nicer to each other in than any place I've ever worked,” he says.

All the while, Torys hasn't neglected its roots. For example, Torys imported James Scarlett from McMillan Binch (now McMillan Binch Mendelsohn LLP), where he practised for 17 years before joining Torys in 2000, to bolster their presence in the dealer community. Already an established force in the securities area, he used the Tory platform to become one of the country's leading income trust lawyers.

“The things I noticed when I came here included an internal level of confidence that you don't see everywhere and a firm-first attitude that isn't just lip service,” Scarlett says. “We don't circulate a bunch of billing and revenue statements all the time because that kind of thing drives individually focused behaviour. The firm thrives on integrity, respect for each other, and respect for other professionals, all of which make it a very special place to be. Neither Hollinger nor New York nor the comings and goings at the firm have changed that.”

The firm also bolstered its reputation in the dealer community by recruiting John Fabello from Fraser Milner in 2005. He joined a securities market litigation group that included Joel Wiesenfeld and Laura Paglia, both formerly of Fogler Rubinoff LLP. The group now populates one of Torys' fastest-growing practice areas.

“I left Fraser Milner because my clients told me that I couldn't get to the next level of work unless I joined a powerhouse brand with a clear reputation in securities,” Fabello says. “They mentioned Torys and Osler Hoskin repeatedly.”

If Torys were an NHL player, the firm would be on the plus side of the plus/minus statistics. Overall, it seems that the lateral hires, virtually all of whom have remained at the firm, more than counterbalance the departees—primarily because they're a better fit.

Indeed, Torys' partner distribution indicates a better balance than at many major firms who are fretting about voids in their succession plans: the partnership is almost equally divided between lawyers who were called before 1989, those called between 1990 and 1999, and those called after 2000.

There's also no sign that Hollinger, New York or turnover woes have impacted Torys' recruitment efforts at any point in the seniority spectrum. At the student level, Torys ranked first in all categories among 101 University of Toronto second-year law students who evaluated firms' performance in the most recent recruitment process.

“No student has ever raised questions about Hollinger,” says Deborah Dalfen, the firm's director of student affairs. “And when they've talked about New York, it has a positive spin because they're curious about the opportunities to work there.”

At more senior levels, Torys can point to Frank Iacobucci's decision to join the firm in 2004 after he retired from the Supreme Court of Canada.

“In the last three years, I've dealt with 40 or 45 lawyers at this firm,” says Iacobucci, who commands enormous respect in the business and legal communities. “The consistency of excellence is striking across the board, just like it was at the court, where Torys' factums were of the highest quality.

“I've been briefed on the Hollinger issue, and two or three clients have asked me about it. But I don't think there's an informed person who thinks the firm's reputation has been diminished. I wasn't fully aware of the details when I decided to join, but it made no difference to me then and it makes no difference to me now that I know more about it.”


In the end, Les Viner—for the last nine years the only full-time managing partner the firm has ever had—is given credit for guiding the ship through the storm. In sync with the Torys' culture, you'd never know it from talking to him. While the firm's detractors are fond of lamenting a lack of leadership in the wake of Jim Tory's and Jim Beattie's giant footprints, there's not a hint of support for that view internally.

“The lack of leadership allegations are coming from people who've left and have their own issues,” says Koval. “Since Les has been the managing partner, we've moved into New York, consolidated there and grown a number of important practice areas. I don't think we've lacked leadership at all.”

Jewett is of the same mind. “Times change and leadership requirements change,” he says. “To my mind, the firm has never been better managed because it is still wedded to its original values and principles in the face of great upheavals in the legal community.”

By all accounts, clients are of a similar view. “In the early part of this decade, our relationship with Torys was spotty and limited,” says RBC's Norris. “Les took the relationship under his wing, asked us how to make it work and then made it work. We now have a broad-based relationship that is one of our top relationships and continues to expand because of the firm's excellence.”

The low point for Torys' collective morale came about a year ago, when the attacks from the press reached a high point.

“We were reeling from the Hollinger allegations, bombarded with negative commentary about the New York office, and we had just lost 10 partners,” Jewett says. “Everyone was feeling a great deal of angst.”

Torys responded by organizing informal discussions among small groups of 15 partners over a period of about six weeks. “What emerged was a spontaneous reassertion that treating each other with respect and trust was more important than it had ever been,” Jewett says. “We realized that we were all still on the same page and we've never looked back.”

Many arts critics believe a work should be judged by the degree to which it succeeds at what it professes to do. If that's the standard, there's little doubt that Torys is still the five-star firm it's always been.

Julius Melnitzer is a freelance legal affairs writer.

Lawyer(s)

Charles E. (Trip) Dorkey III Les M. Viner Patricia A. Koval Clay Horner Darren E. Sukonick Peter E.S. Jewett Joseph (Jay) Romagnoli Andrew J. Beck Michael D. Amm Brian A. Davis James E.A. Turner Geoffrey J.R. Dyer Carolyn N. Naiman Wendy J. Gross Barry J. Reiter Conor D.M. McCourt Andrew M. Shaughnessy Eileen M. McMahon Peter R. Wilcox Robin L.A. Coster Kamleh J. Nicola Sabrina A. Gherbaz James D. Scarlett John Fabello Joel Wiesenfeld Laura Paglia

Firm(s)

Torys LLP Torys LLP Canada Pension Plan Investment Board Caisse de dépôt et placement du Québec Public Sector Pension Investment Board BCE Capital Inc. Abbott Laboratories General Electric Capital Canada Inc. Brookfield Office Properties Trizec Canada Osler, Hoskin & Harcourt LLP Hollinger International Inc. National Post CanWest Global Communications Corp. Essar Steel Algoma Inc. Dentons Canada LLP McCarthy Tétrault LLP Blake, Cassels & Graydon LLP Davies Ward Phillips & Vineberg LLP Bennett Jones LLP