UPDATE 1-Big law firms pick off lawyers from Heenan Blaikie's ranks

Thu Feb 6, 2014 5:32pm EST

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(Recasts with details on talks with DLA Piper, other law firms)

By Casey Sullivan and Euan Rocha

Feb 6 (Reuters) - Two of the world's largest law firms are picking off lawyers from Canada's Heenan Blaikie, which moved to wind down operations on Wednesday in the biggest collapse of a law firm in the country's history.

DLA Piper, the world's largest law firm, is in talks to recruit a group of 55 to 70 lawyers from the firm's Toronto and Calgary offices, while Dentons, which ranks as the world's seventh largest firm, has hired five real estate lawyers and three corporate lawyers in Toronto and Montreal.

Other Canadian law firms have also been scouting for talent and hiring from Heenan's ranks. One source familiar with the situation said McCarthy Tétrault LLP will announce more hires in the coming week, while another source said Fasken Martineau DuMoulin LLP may also recruit a few more lawyers from Heenan's roster shortly.

Heenan Blaikie, a top-tier Canadian law firm well known for its labor and employment practice, said late on Wednesday its partners had voted to dissolve the firm in the face of financial pressures.

The Montreal-based firm, which traces its roots back to the 1970s, said the move came after an in-depth analysis of its restructuring options.

Heenan Blaikie, which at different points was home to former Canadian Prime Ministers Jean Chrétien and Pierre Trudeau, said the wind-up process will take a few months.

Along with many of its Canadian rivals, the firm has been hurt by sharp revenue declines as many corporate clients, keen to keep costs in check, demanded steep discounts of 25 or 30 percent, sources in the legal industry said.

The collapse of Heenan is the largest failure of a Canadian law firm since the demise in 2007 of Goodman and Carr LLP, which at its peak employed more than 140 lawyers.

Heenan had roughly 500 partners and associates at the end of 2013. It also employed more than 600 support staff in offices in Montreal, Toronto, Calgary, Vancouver and smaller cities across Canada. The firm also had an office with a small team of lawyers in Paris.

The storied firm, founded by Peter Blaikie, Roy Heenan and Donald Johnston in 1973, also counted among its partners other prominent Canadians, including former federal Justice Minister Martin Cauchon and the current president of the Canadian Olympic Committee, Marcel Aubut.

The demise of the firm has already resulted in the creation of a new litigation and labor-focused law firm - Gall, Legge, Grant & Munroe, based in Vancouver.

That firm will count Heenan Blaikie founder Roy Heenan, former Supreme Court Justice Michel Bastarache, and former BC Attorney General Geoff Plant in its ranks.

DLA PIPER EXPANSION

"There is a sense of urgency associated with this," said Roger Meltzer, co-chair of Americas at DLA Piper, noting his firm was in "serious negotiations" with 25 to 30 partners in capital markets, mergers and acquisitions, tax, litigation, among other areas.

"They would become DLA Canada," said Meltzer of the firm's possible debut in the country. "In the best sense of the word, it is a middle-market transactional environment (in Canada) with some big players we think could service multinationals around the globe."

A Dentons spokeswoman confirmed the hires but declined to further comment. Two of the firm's lawyers in Canada did not respond to requests for comment about any future possible hires.

Earlier this week, Dentons recruited former Heenan Blaikie corporate partner Michael Ledgett in its Toronto office. It also recruited a group of five real estate lawyers led by partner Chantal Sylvestre in Montreal, along with financial services partner Joel Cabelli and an associate.

Unlike DLA Piper, Dentons already has a large presence in Canada after the firm was created by a three-way merger in 2013 of U.S. law firm SNR Denton, Canada's Fraser Milner Casgrain and Paris-based Salans.

HEENAN COLLAPSE

The firm's collapse was accelerated in part by a rash of recent departures, as some of its top partners, left the firm to join the ranks of rivals in Toronto and other parts of Canada.

Heenan said that during the wind-down process it aims to continue to serve its clients without interruption and to ensure a smooth transition of their cases to other firms.

Its associates learned the news earlier in an email from Toronto office founding partner Norman Bacal.

"It saddens me to advise you that the partners of the firm formally voted to wind down the affairs of Heenan Blaikie. The process will officially commence next week," Bacal wrote.

"It has been a privilege working with all of you. I will be out of town on client business tomorrow but available to speak to any of you on Friday and into next week."

One associate, who spoke on condition of anonymity, said the associates were told they would be paid up to Feb. 15. All employees will apparently have their cell phones cut off at the end of the month. (With additional reporting by Jennifer Brown with Canadian Lawyer in Toronto; Editing by Gail Cohen, Jeffrey Hodgson and Peter Galloway)

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