Fred Crooks is faced with a challenge that most in-house counsel are no strangers to — getting the high-quality external advice required at the greatest cost efficiency available.
As CLO for Bell Aliant, a telco with more than two million customers and 80,000 enterprises in Atlantic Canada, Ontario, and Quebec, Crooks is under the same pressures and constraints as any other head of an in-house legal team.
“As always, the challenge in getting the kind of external advice that you need — particularly if you’ve got the requirement of advice in a wide variety of areas at different levels of expertise and different degrees of specialization — is to get the quality of advice you need at the greatest cost efficiency,” says Crooks from his Halifax office. “We’re in no different boat than anyone else in that regard.”
In his search for a workable solution, Crooks looked at different options for particular transactions or time frames.
RFPs crossed his mind, but the problem with those, he says, is the lowest quote may not equal the highest level of knowledge about the business. On the flip side, if you’re not going out and testing the marketplace every few years, you may not be getting the best value.
“The advantage in continuing and building on established relationships is that you really get a level of understanding of your business and commitment to the business that we think it’s important to have in our external advisers,” he says.
So Crooks got to thinking about alternatives to simply putting out a general call for proposals from a variety of law firms and building on established relationships. And Bell Aliant has its share of established historical relationships (prior to a merger in 1999, Aliant was Bruncor Inc., Island Telecom Inc., Maritime Telegraph & Telephone Co. Ltd., and NewTel Enterprises).
“One of the things that I’ve always been a bit concerned about, particularly to the extent that we’ve got operations in Atlantic Canada as well as in Montreal and Toronto . . . is trying to ensure we get the benefit of the quality of advice and expertise that is to be had in our region,” says Crooks. “There are times when we absolutely need to have highly specialized advice that typically is available on Bay Street, and other times when we need advice that may not be quite as specialized but equally critical and benefits from having a local knowledge and flavour and dimension.”
Crooks could dole out high-level securities work to a large national firm and send labour and employment or real estate files to a local regional firm, but “that didn’t give us the seamless service delivery that we wanted to have,” he says.
“Halifax, and other centres in Atlantic Canada, has a really good depth of talent and expertise, but there are still going to be times where the expertise of a national firm is required,” Crooks muses.
“Is it possible to put the advantage of Halifax or Atlantic rates together with the national expertise in highly specialized areas we get from Bay Street?”
Well, it seems it is possible.
Blake Cassels & Graydon LLP in Toronto had worked on the financing end of the 1999 merger and has an established relationship with Crooks and Bell Aliant. On the local side, Cox & Palmer in Halifax also has an established relationship with Crooks and Bell Aliant — in fact, prior to going in-house, Crooks was a lawyer at Cox Hanson O’Reilly Matheson, better known now as Cox & Palmer.
Was there a way to leverage the relationships, along with an 11-lawyer in-house team at Aliant, to form a seamless delivery of high-quality legal services at a lower cost?
“My initial thought was, why can’t I just get Cox & Palmer and Blakes to work together almost as if they’re providing services on a blended basis — as if they were one firm?” says Crooks.
“I can understand the organizational challenges associated with that, but these are smart, service-oriented people, and unless there was some rule of professional practice or conduct that prevented it, then I can’t see why this isn’t something that could be worked out.”
Crooks says he was warned by some that he wouldn’t likely find a Toronto firm that would treat an Atlantic Canada firm as part of its firm for the purposes of staffing a file, but Crooks threw out that challenge to Cox & Palmer and Blakes.
“They worked up a model where they satisfied themselves that this could work. They spent a lot of time together sorting out their respective areas of expertise — who could do what best — how would it work to have a Toronto partner working with associates at a different firm in Halifax,” he says.
“What they’ve come up with is a solution that we’re very happy with and that has produced, on some significant transactions, what we believe are substantial savings or substantial costs that we avoided that otherwise would have been incurred,” he says.
Sure, it works for Crooks, but does it work for the firms involved? Is it an organizational nightmare to staff a file?
“I think you can’t lose sight of the fact that the top priority and objective here is proper service to the client,” says Danny Gallivan, managing partner of the Halifax office of Cox & Palmer.
“Why does it work? I think it works because the pre-existing relationship gives rise to a number of intangibles that are critical to underpin this relationship,” he explains.
“First, there has to be mutual respect. Secondly, there’s got to be trust. Third, there’s got to be confidence in the skill sets of every party of the relationship. And fourthly, there can’t be any territoriality in place.”
Gallivan says a firm in an arrangement such as this has to be prepared to say that, in some circumstances, someone from the other firm should do a certain task.
“Collectively, the whole is better than the individual parts,” he says. “That’s why I think it works. We’ve had the good fortune of having a number of transactions where it has worked and it seems to be a natural fit.”
Richard Corley, partner at Blakes’ Toronto office and head of the firm’s IT group, says he thinks there are a number of key elements that are responsible for the success of the arrangement.
“There’s tremendous leadership in Bell Aliant in their legal group with Fred Crooks and his team. He has a very clear vision and is excellent at communicating that vision and really helping to drive the efficient allocation of work between the different lawyers so we avoid duplication of effort,” he says.
It’s been over a year since this formal arrangement has been in place, and the best test of the relationship so far, says Crooks, was right at the start, with the $330-million sale of Aliant Directory Services to the Yellow Pages Group last year.
“That’s really where this plan first hit the ground. We really saw how well this could work and we really saw the cost benefits,” he says.
And Crooks continues to see the benefits to this model, although he realizes it’s not for everybody.
“The model assumes an excellent relationship and regard among the firms that are involved and participating in this. There’s got to be a confidence, and both firms have to have a level of trust in each other that they could work together and make this work,” he says.
“There’s no rocket science about this. We find we get great value and advice out of this. We’re very pleased with the advice we get from these firms, and to have them working together collaboratively really makes a noticeable difference.”
Cox & Palmer’s Gallivan agrees: “One size doesn’t fit all. You’ve got to look at the specifics of the client’s needs and the relationship that exists among the firms and the ability to provide what the client desires, which is cost-effective quality service,” he says.
“If people aren’t willing to work co-operatively, then clearly they don’t have the client’s best interests at heart and it’s not going to work. And you’ll find that out awful quick.”
Corley says that while this kind of arrangement is comfortable for a firm like Blakes, it is something that needs to be practised in order for it to work better.
“You need to build up the experience and levels of confidence and trust and respect and just understand that we’ve all got our eyes on exactly the same ball — helping our client to get the particular transaction done in the very best way possible and to give them collectively the best legal representation,” Corley says.
“I think if you keep that focus in mind it can work very well and does work very well.”