Quebec economy strong
“The
Quebec economy has been quite strong and there’s a positive business
climate,” says Rubin, who also heads the real estate arm of the
70-lawyer regional independent firm.
“The marketplace is well
covered by national firms and strong independent firms,” he adds.
“There’s room for both types of players.”
Jauvin suggests boutique and mid-size firms “have to focus on our areas of strength and what we want to develop; recognize our forte.”
While
he doesn’t necessarily see Montreal as a growing market, Jauvin says it
is healthy and the smaller firms are still making money.
“Income isn’t a problem at this point, but the question is, what about five years down the road?” he wonders.
One
major firm continuing to expand under the current conditions is Fasken
Martineau DuMoulin LLP, born of the 2000 merger with Montreal’s
Martineau Walker, Fasken Campbell Godfrey of Toronto, and Russell &
DuMoulin of Vancouver.
“We’ve doubled [in size] in Quebec
the past 10 years,” notes Fasken Martineau managing partner Claude
Auger. “We can make massive investments smaller firms can’t afford.”
Faskens,
celebrating its centennial in 2007, extended its reach further earlier
this year by first merging in February with London, England-based
commercial firm Stringer Saul LLP to create the biggest Canadian legal
office in Britain. Then in mid-March it joined with Ottawa
communications law firm Johnston & Buchan LLP.
Quebec’s emerging
technological development scene saw intellectual property specialist
Bereskin & Parr follow Blake Cassels and Osler Hoskin to open an
office in Montreal two years ago.
“It just came up as a matter
of casual conversation at IP meetings in mid-2004,” managing partner
Lloyd Sarginson recalled in a phone interview from the firm’s Toronto
headquarters. “We began to think about getting more of the Quebec IP
market and started more dialogue and it grew from there.”
He
says it was decided a presence was needed in Quebec “because there was
a lot of our kind of work there, but we couldn’t service it from
Toronto. Montreal was the place for us to be to do it and we needed
folks preferably from Quebec who had worked in that environment and had
a following.”
One such person was patent agent France Côté, whom
Bereskin & Parr raided from a Montreal-based national law firm to
head the new office.
In a short time, Côté says the IP boutique firm became “one of the key players in Montreal.”
The
office, which began with two professional staff members then doubled in
size within less than six months and now employs more than a dozen
people, is scheduled to move into new space twice the size next month
because it has already outgrown the current premises.
André
Vautour, managing partner at Desjardins Ducharme LLP, concedes his
140-strong office is one of the shrinking number of mid-size firms
remaining in business, but he doesn’t have a problem with that.
“Our
position is regional, Montreal and Quebec City, with no strategic
objective to be national or to have a presence in Toronto,” he says.
Vautour
explains it isn’t necessary to set up shop outside the province in
order to get work from the rest of Canada and that being independent is
in Desjardins Ducharme’s favour in that regard.
“Since there are
fewer independent firms here, we get lots of Toronto, Calgary, and
Vancouver business [from firms in those cities] who don’t want to give
work to their competitors,” he notes.
End of greenfielding?
Most see an end to greenfielding into Montreal from Toronto or other Canadian cities.
“There’s
no buzz in the marketplace about another Toronto firm coming,”
according to Rubin. “We’re probably not going to see many more, if any.
We don’t see any need to hook up with a Toronto-based firm.”
Pierre
Sauvé — the managing partner at Bélanger Sauvé, formed by the 1967
merger of two Montreal firms — says, “There are lots of rumours about
us, but we have no plans [to merge].”
Jauvin predicts if there
are any more mergers, “It will be the consolidation of mid-point
independents who don’t have the financial means to fight mergers.”
As
far as work for everyone, Vautour admits lots of businesses have
disappeared due to reasons such as globalization, but is quick to add:
“There is an emergence, a new wave of businesses in the regions —
entrepreneurs who are susceptible to grow and expand outside Quebec in
the coming years.”
Cobbett at Stikemans also stresses there are
still “significant corporate players around,” listing Bombardier,
Quebecor, Air Canada, Gildan Activewear, and Garda World Security
Corporation as some of the many examples of companies that maintain
head offices in Montreal.
Head office decline
An
analytical paper released by Statistics Canada last July entitled Head
Office Employment in Canada, 1999 to 2005, states the number of
headquarters in Montreal shrank from 596 to 536 during that seven-year
period.
But the authors pointed out Montreal continues to be the
country’s second most important head office center after Toronto — with
Calgary rising quickly.
“Between 1999 and 2001, head office
employment in Montreal declined, but since 2001 these losses have been
fully recovered,” Desmond Beckstead and W. Mark Brown wrote in their
19-page report.
Although the revival wasn’t strong enough for
Montreal to regain its 1999 23-per-cent share of head office
employment, they said it had a 21-per-cent share in 2005.
Montreal
is also home to more than 60 prestigious world organizations ranging
from the International Civil Aviation Organization and International
Business Aviation Council to the Asbestos Institute and SITA, a leading
service provider of IT business solutions and communications services
to the air transport industry.
The industries still driving the
local economy are aerospace, information and communication
technologies, life sciences, and manufacturing — even though Jauvin
says he has closed more plants than he has opened of late.
All agree
another key to survival for firms big and small is keeping star staff.
Even the industry giants aren’t immune to losing their best and
brightest either.
“A lot of very smart, committed young kids are
coming out of the law schools [an average of 900 a year graduate from
the Barreau du Québec bar school] and the trouble is keeping them,”
says Cobbett. “We’ve lost
some very good young lawyers to firms in Paris, London, and Singapore.”
Barbara
Shore of Shore & Associates, which specializes in the staffing of
senior in-house counsel positions and the strategic recruitment of
lateral hires for law firms in Montreal, says the lure of working
overseas has become much more accessible for junior and intermediate
associates with top skills.
“In addition to the fact that
international firms compete with local firms in on-campus recruitment
of new grads, legal recruiters are also retained by the major
international firms to recruit associates for their office,” she says.
“Keeping
star staff has become a complex issue. Law firms are working hard to
retain and keep their star performers motivated and committed,” Shore
says. “Legal career options are vast and varied. Luring lawyers from
one firm to another is more aggressive, and with the recognized
acceptance of legal recruiters, the task of identifying and attracting
the best is effectively outsourced.”
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