Michael McKiernan

The home field advantage
Posted Date: May 07, 2012

Regional law firms in Quebec are hoping to prove the home field advantage is just as much a factor in legal services as it is in sports.
Canadian Lawyer returns to Quebec this year for our latest regional firm survey, to find the province’s full-service outfits jockeying with local and national rivals alike for a position on Plan Nord, the multibillion-dollar project for the development of Quebec’s north. “In Quebec, everybody talks about Plan Nord, which I think is simply applying what you already do in a new conjuncture. There’s a lot of opportunity there,” says Chantal Chatelain, managing partner of the Montreal office at Langlois Kronström Desjardins LLP. “The fact of being a regional firm I think is a great advantage because we’re already spread out across the province, we already have the business relationships with entrepreneurs in the construction industry in the north, and we have experience in dealings with government regulations and authority.”
Top-ranked Lavery de Billy LLP and its predecessors have spent the better part of a century cultivating roots in the province, and Richard Dolan, the chairman of the firm’s board, says that continues to give them an edge over larger newcomers to Quebec’s legal market. “Our deep understanding of the Quebec business market has positioned us really well. It allows us to quickly understand the opportunities and challenges that the Quebec market presents to not only our Quebec clients, but also national clients,” he says.
At Lapointe Rosenstein Marchand Melançon LLP, another firm with more than 50 years of history, co-managing partner Bruno Floriani says the recent economic downturn has increased demand for regional firms like his, even from international businesses looking to expand in North America. “We got looked at a lot more seriously by some in-house counsel who were looking to retain the same quality of service, but perhaps without the infrastructure that goes along with the national firms,” he says. “There is a growing realization among some of the larger international companies that there are very good lawyers in these regional firms that are as good as any of the national firms.”
At the other end of the scale, Delegatus Services Juridiques Inc. makes its first appearance on our list in just its seventh year of business. The firm has established itself with a unique business model that offers senior lawyers flexible work arrangements and pricing options. The strategy has paid off, attracting lawyers from larger, more traditional firms and an impressive roster of clients. “We allow our lawyers to self-determine the amount of time they put in in billable hours yearly, so our work environment is much healthier. They don’t take as many clients maybe, but the ones they have they are extremely well looked after,” says vice president Paul St-Pierre Plamondon. “We’ve tripled our revenues in only a year and a half, because our lawyers are anything but laid back. They care about an excellent life, but they’re also very proactive and entrepreneurial.”
At LKD, Chatelain has also made headway attracting talent from national firms. “What lawyers see as a big advantage is they have more flexibility. They could be a very small fish in a very big pond, or a big fish in a smaller pond. Financially speaking, there’s not that much difference between the two. In fact, sometimes they get a better cut in a firm like ours than one with a very large business structure to support,” she says. “We’re living proof that not only is there space for regional firms, but there’s a vibrant space for us and a need.”
Read on to find the full list of Quebec’s Top 10 Regional Firms. The 2010 positions are noted in parentheses.
Photo: Luc-Antoine Couturier
Regional law firms in Quebec are hoping to prove the home field advantage is just as much a factor in legal services as it is in sports.

Looking to the future — part 2
Posted Date: April 02, 2012

This article is a continuation of "Looking to the future" from the April 2012 issue of Canadian Lawyer magazine. Click here to read part one.

Looking to the future — part 1
Posted Date: April 02, 2012

Canada’s litigation boutiques are looking to the future. Finding a firm with the right mix of experienced and emerging talent was a recurring theme in this year’s top boutiques search, and some of our winners have been the most successful at striking that balance, proving that succession planning works at firms of all sizes.
“A number of boutiques in Canadian legal history have started with great strength, but have been unable, or simply unwilling, to carry it on. Sometimes people don’t want to and it lasts as long as the careers of founders,” says Tom Curry, a partner at Lenczner Slaght Royce Smith Griffin LLP — a firm he says has shown a commitment to outlasting the five name partners who departed McCarthy Tétrault LLP in 1992 to go it alone and start the firm. “From the beginning, people have been attracted here by the reputations of the lawyers, and it remains true, because we’ve been able to duplicate that strength in the younger generations. I’m fascinated by the challenge of maintaining the strength over the long term, and I find one of the things that really adds to my law practice is the opportunity to develop other people and pass along things,” says Curry.
And while litigation boutiques have been able to thrive in the shadows of their full-service counterparts, sweeping up referrals on the largely conflict-free sidelines, they aren’t afraid to go up against Bay Street in the market for the hottest new litigators.
Randy Kaardal, a senior partner at Hunter Litigation Chambers in Vancouver, says his firm has no problem recruiting the top candidates out of law school, including those who’ve had clerkships at the Supreme Court of Canada and other appellate courts across the country. “They get to see our people before those courts and get a sense of the type of files that we are on, which tend to be interesting and exciting to be a part of,” he says.
At the same time, Kaardal says the big-firm history of Hunters’ senior litigators has been crucial, allowing the firm to develop a style that some of their larger corporate clients will recognize. “Clients that are involved in sophisticated litigation expect the work product to look a certain way. We have that capacity, so it’s relatively seamless when we’re referred by one of the large commercial law firms,” he says.
And ex-Big Law partners aren’t confined to the litigation field. Barbara Jo Caruso left Gowling Lafleur Henderson LLP in 2006 to form Corporate Immigration Law Firm with Gowlings immigration consultant Harry Goslett, although the pair didn’t move physically too far from their old digs. “When we branched out, having a Bay Street address was important, because it provided us with a certain amount of credibility with existing clients that were prepared to deal with us outside of the national law firm. Some were concerned that we didn’t just set up in our basements, and do the work there,” she says.
Caruso says lawyer referrals have helped the firm flourish since its founding. “I think other firms feel comfortable referring to a boutique knowing we’re not going to take their employment or their real estate work, or forget where the file came from,” she says.
Few large law firms place an emphasis on business immigration, which has left plenty of room for boutiques in the marketplace. One of the largest players in the market is Egan LLP, an affiliate of accounting giant Ernst & Young, which also made our list. Another EY affiliate, Couzin Taylor LLP, is on our tax law boutique list, where accounting firm affiliates are a growing player in the market.
But Brent Perry, a partner at Alberta-based tax firm Felesky Flynn LLP, says there will always be a place for boutiques like his, with no professional services firm affiliation, because of the certainty they can offer over solicitor-client privilege, especially in an era of heightened scrutiny from the Canada Revenue Agency. “We’re seeing an increased level of appetite for challenge by CRA, even for transactions that may have been previously blessed by them. That in turn leads to a higher degree of sensitivity of solicitor-client privilege,” he says.
Matthew Williams, a partner at Thorsteinssons LLP in Toronto, says tax law is particularly well suited to a boutique environment because the area’s reputation for being extremely complicated is well earned. He says the concentration of expertise benefits practitioners as well as clients. “We think size matters. It’s a very specialized area and if you’ve got lots of people with decades of experience, you’ll have a lot of it covered. I would be terrified to work in a place with just two or three people doing tax,” he says.
Canadian Lawyer’s editorial team began the process of selecting Canada’s top five tax and business immigration (both areas for the first time) firms and top 10 litigation boutiques by creating a short list of the most notable firms in their respective fields. We ran a short online survey and from there, we drew on the experience of in-house counsel and large-firm lawyers who refer work to these boutiques, conducting a series of confidential interviews to identify the cream of the crop. That input was used to compile the following results, listed in alphabetical order.
Canada’s litigation boutiques are looking to the future. Finding a firm with the right mix of experienced and emerging talent was a recurring theme in this year’s top boutiques search, and some of our winners have been the most successful at striking that balance, proving that succession planning works at firms of all sizes.

Regulator at a crossroads
Posted Date: April 01, 2012

Illustration: Marco Cibola
The Ontario Securities Commission is looking far beyond the province’s borders as it formulates a plan for its future approach to regulation.

Eyes to the soul of justice
Posted Date: March 05, 2012

When a California jury acquitted O.J. Simpson of two counts of murder in 1995, the verdict delivered a where-were-you-when moment to people around the world. But the trial also gave Canadian advocates for cameras in the courtroom their biggest and longest-lasting headache. The case has become a textbook argument against putting cameras in the courts, with grandstanding lawyers on both sides, an allegedly star-struck judge, and an orgy of commentary stoking a media frenzy around the televised trial.
That same year, the Supreme Court of Canada allowed CBC Newsworld to broadcast live a tax case concerning spousal support payments, Thibaudeau v. Canada, and shortly thereafter began broadcasting its proceedings regularly on the Canadian Public Affairs Channel. But rather than setting a precedent for televising proceedings, progress outside the country’s top court has largely stalled, with the spectre of O.J. raising its head in every province that tackles the issue.
“I think the O.J. Simpson trial and some other sensational cases in the U.S. are responsible for the visceral reaction you find by many people against it,” says Dan Burnett, a media lawyer at Owen Bird Law Corp. in Vancouver. Burnett, who has been a key player in the campaign for cameras in the courtroom in B.C., sees the Simpson case as an anomalous one. “They have been televising trials for a long time in the U.S. and for the most part, it works fine,” he says. “They may have a problem there with celebrity trials, but I don’t see us having that same problem in Canada, and of course if we did, the ongoing discretion of the judge to just turn off the cameras would kick in.”
In 2001, Burnett argued unsuccessfully on behalf of broadcasters seeking to televise the criminal trial of former B.C. premier Glen Clark, who was charged with breach of trust in relation to home renovations performed by a neighbour who had also applied for a casino licence from the province. The broadcasters, vigorously opposed by the province’s attorney general, appealed to the Supreme Court of Canada, but Clark was acquitted before it could be heard, rendering the appeal moot.
In late 2010, then-attorney general Mike de Jong softened the stance of his office, launching a pilot to video record sentencing proceedings at three provincial court locations. Then in early 2011, Burnett convinced B.C. Supreme Court Chief Justice Robert Bauman to allow cameras in to record the closing arguments in a hearing over the constitutional validity of Canada’s anti-polygamy laws. The CBC streamed the arguments online with a 10-minute delay. “Most Canadians haven’t actually sat down and watched our courts in action. It might not be the most sensational thing around, but it is very impressive. You realize that this is a fair process, that these are serious people who are trying to treat witnesses and parties fairly, and it’s a shame that citizens can’t see that more for themselves,” says Burnett.
He says he was surprised last year when the provincial government completed its turnaround, announcing that it, rather than media organizations, would initiate applications to televise trials for alleged Vancouver rioters following the Canucks’ 2011 Stanley Cup loss. “In a way it’s been coming. Obviously, attitudes have changed, and probably for the better in terms of openness of the courts,” says Burnett. “It’s just an opportunity, as I see it, to use technology to expand the courtroom gallery. We start with this principle that the courtrooms are open, but that principle loses a lot of its reality when you take into account that the massive majority of citizens really can’t come and attend court in person. They work during the day, or they live out of town. Even if they could come, there’s very limited seating, so only a tiny fraction of the public can actually see the court firsthand. Having the open door and the gallery seats there is, in many cases, nothing more than symbolic openness.”
The B.C. government’s push for cameras met with an unenthusiastic response from the Crown attorneys who were forced to make the applications to televise. Six prosecutors are working on the riot file, recommending charges against about 80 individuals. “They have concerns around their personal security. Their position is that they’re not going to consent to their own images being televised, which is something the court needs to consider,” says Jamie Chaffe, president of the Canadian Association of Crown Counsel.
And while the attorney general may be able to impose her will on the Crown’s office, the ultimate decision-makers, the judiciary, are another matter altogether. De Jong’s successor in the office, Barry Penner, was forced to shelve his sentencing pilot after running into stiff resistance from provincial court judges, while the Canadian Judicial Council’s official position on televised trials is that it “is not in the best interests of the administration of justice.”
In mid-February, however, B.C. Attorney General Shirley Bond was forced to scale back her plans after Provincial Court Justice Malcolm MacLean denied the first application to televise, in the sentencing of a rioter who had pleaded guilty. MacLean rejected an argument that the application was politically motivated, but said there were too many unanswered questions around the safety of court personnel and the re-broadcast of footage, instead suggesting the appointment of an amicus curiae to study his concerns in greater detail.
That prompted Bond to rescind her direction to Crown counsel, citing the delays MacLean’s approach would cause, but reaffirmed her commitment to cameras in court. “In the meantime, we will carefully consider Judge MacLean’s decision, and we will continue to look for opportunities to make the justice system more transparent to all British Columbians,” Bond said in a statement.
But some had already dismissed the government’s move as a gimmick, and some advocates fear that what may have been seen as a leap forward, may in fact have set back the campaign for televised court proceedings. Robert Holmes, president of the B.C. Civil Liberties Association, has suspicions about the provincial government’s long-term commitment to the idea. “If this is meant to be a test run, as a precursor towards a broader use of cameras in the courtroom, then all power to it,” says Holmes. “On the other hand, if the government is solely doing this to add an extra degree of stigmatization to a particular group, and they plan on never letting cameras in again, then I’m not sure I want them on my side, because their motives are suspect.”
Paul Burstein, the former president of Ontario’s Criminal Lawyers’ Association, concedes that the time may have come for cameras in the courtroom, but is unimpressed by the intial approach of the B.C. government. “It should be for the right reasons, and this is clearly for the wrong reasons. It promotes public shaming and potential vigilantism, which is just wrong,” he said prior to MacLean’s ruling. “I think it’s appalling. Not only is the intention to shame, but the subtext seems to be that the government wants people to know the faces of those responsible, so that if the courts don’t mete out enough punishment, the public can sit in judgment as to what else should appropriately be administered to these individuals by way of public ridicule, spitting on the street, and so on. I’m exaggerating to some extent, but what else is the purpose?”
Donna Turko, a Vancouver criminal lawyer and former television journalist, earned her MA in sociology and anthropology a decade ago with a thesis that examined the deep-seated division between legal and media professionals over cameras in the courts. She says it was never likely judges would grant applications to televise riot trials, especially over the objections of defence counsel. “In general, the legal profession doesn’t trust the media, because there’s an innate sense that for the media, it’s about making money, and not protecting rights,” she says.
According to Burnett, the more judges see cameras in action, the more comfortable they will become with the idea. He says judges who have led commissions of inquiry, which are often televised, rarely come away opposed to the idea. “Generally what they see is that it all works in a pretty civilized way, and it’s not such a big deal. The fear of the bogeyman disappears.”
Chaffe says he’s keen to see courts retain the final say on whether or not to allow cameras, and says that view is backed up by the January 2011 Supreme Court decision Canadian Broadcasting Corp. v. Canada (Attorney General). In that case, the top court upheld the constitutionality of a Quebec Superior Court directive that limited journalists’ use of cameras and recording equipment to certain areas of the courthouse.
But it’s another critical courtroom player that is central to his organization’s opposition to cameras in court — the witness. “One of the real challenges, particularly with serious criminal offences, is whether or not we can actually get witnesses to come forward and testify. It’s a challenge that gets much more difficult when witnesses feel that not only will they be in open court facing the accused, and possibly media in the courtroom, but that their image could be projected on a daily basis across the country contemporaneous with the trial,” says Chaffe. “Television may actually inhibit access to justice and access to the court if witnesses or victims don’t want to speak out.”
But Holmes says judges can easily work around sensitive witnesses by obscuring images or distorting voices where they deem it appropriate. “That’s fair because there are valid excuses and reasons for limiting it in some contexts,” he says. Burnett agrees that the judge should have control over what can be broadcast, and says concerns about witnesses are “overblown.” “It isn’t as if you turn on the camera and there’s no turning back,” he says. “The reality is high-profile cases attract lot of attention, and you’re going to have a packed gallery, sketch artists, camera crews outside doing reports, the judge sitting up at an imposing-looking desk, and people being cross-examined aggressively. The idea that this one little camera sitting on a tripod at the back of the room is going to be the thing that suddenly makes a witness unable to testify properly is a bit of a stretch as far as
I’m concerned.”
Chaffe doesn’t object as strongly to the potential broadcast of appeal court proceedings. Live witnesses there are not an issue, which may help account for the Supreme Court’s pioneering position on this area.
Its decision in the 1981 Patriation Reference case was the first in the country to be televised live. From 1993 to 1995, the court allowed cameras in three times to cover cases involving the tax deductibility of nanny expenses, the right to assisted suicide, and the tax deductibility of spousal support payments, before CPAC began regularly broadcasting from the court. Since 2009, the court has branched out even further, launching live webcasts and archiving video footage of hearings.
Ironically, that puts the Canadian Supreme Court at odds with its American counterpart, which has traditionally eschewed television cameras, despite their widespread use in state-run courts. All 50 states allow cameras in their courtrooms. The U.K.’s experience broadly mirrors Canada’s, where the only court that allows cameras is the Supreme Court.
Appeal courts have also been at the heart of provincial experiments with cameras in court. Nova Scotia invited applications to broadcast hearings from its appeal court for two years from 1996 to 1998. Meanwhile, in Ontario, the province’s 2006 Panel on Justice and the Media, including luminaries from the legal and media spheres, recommended an amendment to the province’s ban on cameras in the Courts of Justice Act, to allow them for proceedings in the Court of Appeal and the Divisional Court, as well as motions and applications in Superior Court that involved no witness examination. “In such cases, televising should be broadly permitted. The court should always have discretion to exclude television, but only after giving due consideration to the value of openness,” the panel wrote. “Some may see this as a small step. We do not think so. . . . The people of this province will have an opportunity to be eyewitnesses to important aspects of the justice system in action. Whether they watch for inspiration, education, or even entertainment, they will be observers of a historic process, which is a critical element of our democratic system.”
A three-month pilot followed in late 2007, when one courtroom at the province’s Court of Appeal was outfitted with cameras and microphones. The $365,000-project saw 21 cases streamed online across 20 court sessions. Only one of the cases, an appeal by a man wrongly convicted of killing his young niece, garnered much media coverage, but the court’s web site logged 18,000 visits, and 95 per cent of those interviewed for an evaluation report said the pilot enhanced openness, while 85 per cent called for an expansion to other courts.
The 2008 report on the pilot was only released in March last year after a freedom-of-information request, and then-attorney general Chris Bentley said he was open to revisiting the issue. Brendan Crawley, a spokesman for the Ministry of the Attorney General, tells Canadian Lawyer that privacy issues remain a concern, but that consultations are underway with chief justices of all three of the province’s courts. “We need to ensure that we approach this in a thoughtful and comprehensive manner. These are informal consultations, and we have not placed any firm timelines for them to be completed,” says Crawley. In the meantime, there are no cameras in Ontario’s courts.
John Honderich, the former editor and publisher of the Toronto Star, was a member of the 2006 panel on justice and the media. He says he was advocating to have cameras present at all levels of court, but has been disappointed at the lack of action even on the panel’s watered-down recommendations. “This was a compromise that everyone was supposed to be able to live with, but I think they just weren’t prepared to take on the legal establishment,” says Honderich. “The establishment in this province has been very strongly imbued, and I guess the government just didn’t see this as a battle they wanted to fight.
For Turko, the problem with the focus on appeal proceedings is that they are the ones of least interest to the public at large. “It’s like watching paint dry,” she says. “From an academic point of view, there are certainly things to be learned, but the exercise doesn’t really go anywhere if nobody watches it. It comes down to the quantum of what you’re going to get for costs that could be put elsewhere in the system.”
In the B.C. context, Chaffe says he would rather see the money and court time being spent on applications to televise instead being used towards dealing with inadequacies in the court system there. “They’ve got 2,500 cases over 18 months waiting for trial, and they’re 20 judges short of full complement at the provincial court level. This is going to hamper the ability of the justice system to react to other cases that the public may very well regard as a higher priority, like sexual assaults and homicides, which we think is harmful,” he says.
Illustration: Carl Wiens
When a California jury acquitted O.J. Simpson of two counts of murder in 1995, the verdict delivered a where-were-you-when moment to people around the world. But the trial also gave Canadian advocates for cameras in the courtroom their biggest and longest-lasting headache. The case has become a textbook argument against putting cameras in the courts, with grandstanding lawyers on both sides, an allegedly star-struck judge, and an orgy of commentary stoking a media frenzy around the televised trial.

Articling how-to
Posted Date: February 27, 2012

As law societies grapple with a crisis that could change articling forever, students are still looking for their own ways to clear the final hurdle to a career in law. Staff writer Michael McKiernan asked articling students past and present for their advice on setting up articles away from the mainstream and at smaller firms.
As law societies grapple with a crisis that could change articling forever, students are still looking for their own ways to clear the final hurdle to a career in law. Staff writer Michael McKiernan asked articling students past and present for their advice on setting up articles away from the mainstream and at smaller firms.

Judging the judges
Posted Date: February 06, 2012

Illustration: Tara Hardy
In almost two decades of practice, criminal lawyer Paul Slansky had never complained about a judge. But one day in July 2004, he resolved to change that. Ontario Superior Court Justice Robert Thompson had just ordered him confined to the courthouse in Owen Sound, Ont., while jurors deliberated on the fate of his client, Vytautas Baltrusaitis, who was charged with murder. Toronto-based Slansky, who was staying at a hotel just a couple of minutes’ walk from the courthouse, viewed the move as malicious and petty. “However this conduct was merely the straw that broke the camel’s back,” Slansky wrote in an affidavit following the trial he called “the most difficult of my career.”

What's the future of glass houses?
Posted Date: February 01, 2012

When condo historians look back on the early 21st century, they may identify 2011 as the year Toronto’s love affair with the glass tower began to sour.
The summer was punctuated with incidents of falling glass from high-rise balconies shattering in the downtown streets, and the year ended with some developers and engineers voicing their concerns about the long-term durability and energy efficiency of buildings whose primary protection from the elements is a wall of double-glazed glass.
“Obviously, developers are very concerned, particularly when you look at the number of condos that have gone up, and are still going up using glass,” says Leor Margulies, a partner at Robins Appleby & Taub LLP, who is also a member of the executive at the Building Industry and Land Development Association.
He says it’s essential developers get engaged when potential issues come up.
“It’s tough, because the industry wants to make money, and on the other hand it has to be socially responsible, and I think it is. They’re actually really innovative and a lot of the buildings that are being built go well above the building code,” Margulies says.“It’s not for the industry to set the standards. It’s for the industry to work with the regulators to improve standards, which is constantly happening. But if there’s a problem, then the industry and government will sit down as they always do and try to find a realistic solution.”
Sally Thompson, an engineer with Toronto-based Halsall Associates, conducts reserve fund studies for condominiums, calculating the amount of money they need to set aside for future repairs and maintenance. She says window walls can be a significant source of major projects, typically accounting for around 20 per cent of condo owners’ reserve fund contributions.
In the early years after construction, she says the quality of the sealing job between slabs of glass can make a big difference. Once the building is complete, the original seal becomes inaccessible and the joints have to be resealed from the outside. In the first decade, some buildings get away with repairs to a few localized leaks, but one seven-year-old condominium she has done work for is spending around $500,000 to seal up joints on its tower. “With glass, there are so many joints to seal up that those projects become pretty significant. Some of these buildings need seven to 20 kilometres of caulking on a single tower,” Thompson says. “In a perfect world, no cladding should need that major of a repair after five or 10 years. If you bought a brick building or a pre-cast concrete building you wouldn’t expect it.”
At Earth Development, which bills itself as a socially responsible property developer, the company steers clear of glass walls, because of concerns over building performance.“We’re not anti-glass, we’re anti-all glass. It’s overkill to do floor-to-ceiling glass; you just lose so much energy,” says principal Mark Johnson. His colleague David House says there are ways to get a glass look by simply covering a better insulated pre-cast concrete wall with an outer layer of glass, but developers tend to be more attracted to the cheaper option of a glass wall.“We want to believe it works. The market likes it, it’s kind of cool to look at, it’s cost-effective, and none of us are really forced to measure energy, so it doesn’t really matter. But if people buying condos or leasing office space were the ones building the building, I don’t think they would be interested in all-glass buildings. As soon as you figure out this will double or triple your energy bill, you’d think it was nuts,” he says. “Some day, given our litigious society, I think someone will figure out this doesn’t work and want to talk about how to get some compensation somewhere.”
Mark Arnold of Gardiner Miller Arnold LLP has represented a number of condo corporations in disputes with developers, including unit owners at Harry Stinson’s landmark downtown Toronto 1 King West development in a long-running dispute involving various alleged deficiencies. “One portion of it was similar to what you have with glass falling from balconies, because there were parts of the exterior cladding on the building that started falling off. We had to prove why it fell off and to what extent the builder had investigated from an engineering standpoint.”
The case eventually settled with a global settlement before trial, making conclusions difficult to draw, but Arnold says cases like the Supreme Court of Canada’s 1995 decision in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. make it possible to go after builders many years after completion. In that case, the condominium corporation was able to recover its costs for repairing dangerous defects caused by negligent design and construction 15 years after the building was substantially complete. Unit owners had to pay to replace the entire cladding after discovering the problem when a large section fell nine floors to the ground.
One problem Arnold frequently runs into with developer lawsuits is finding a source of money so he can enforce any judgment. “By the time the lawsuit raises its head, the builder-developer may have gone or the company is left as a shell,” he says.
But that doesn’t stop him from pursuing the matter if there’s a case to be made for developer liability. One case he’s currently working on involves a condominium corporation left with $500,000 worth of repairs to bring the project up to code. “The developer is saying they’re not going to fix it, and there’s no money left to fix it, so don’t bother us,” Arnold says. “So I have sued personally the developer’s sole director, officer, and shareholder, trying to pierce through the company veil to get to the warm body, and he doesn’t like it very much.”
Margulies is keen to stress that buildings with alleged glass problems have been meeting the Ontario Building Code, and says the falling balcony episode provides a textbook example for the way developers and the authorities should react when issues arise. In a November report, Toronto’s city council recommended emergency amendments to the province’s building code after investigating six buildings at four sites affected by falling glass from balconies. Those included the Festival Tower at the TIFF Bell Lightbox and a number of buildings owned by Lanterra Developments. By the time the report came out, Lanterra had already announced plans to replace tempered glass on its balconies with laminated glass. The process for making the less expensive tempered glass involves putting stress into the glass, which means that it breaks into small pieces when it fails. Laminated glass, on the other hand, does not shatter, meaning it is more likely to stay in place when it does crack. “Our first priority is the safety of the public and our residents,” said Lanterra in a statement in August when the change was announced.
Margulies says the Building Industry and Land Development Association’s members were immediately involved with the city to find out why glass was falling and what should be done about it. “You can only build in terms of standards that are set, so if there’s something wrong with the standards or one of the products, then it has to be determined and the builders will work with it,” he says. “The code is always being upgraded and we work closely with the building code commission.”
In addition to strict code compliance, Margulies says developers need to go back to basics to minimize risks, spending time vetting consultants, subcontractors, and suppliers.
“My grandmother used to say she couldn’t afford to buy cheap shoes. Yes, developers are always looking for the best price for profit, but they’re also looking to build a good product, and the builders that use the right consultants, and maybe spend a little more on the right product are hopefully less likely to encounter problems,” he says. “My big builders are very cognizant of ensuring that they don’t end up in lawsuits because of poor design or poor products. They want to have a product they can rely on when they go to the market again. If there are problems happening, that gets out.”
When problems do arise, as they inevitably will, many will be covered by the Ontario New Home Warranties Plan Act, which imposes mandatory seven-year warranties on new homes in the province. The act is administered by the Tarion Warranty Corp., and Margulies says developers’ behaviour in the process can have an impact. “If you’re going to be in business, things will happen. You can’t avoid it. If you build a 60-storey building, there will be deficiencies and issues, but I think the solid builders step up to the plate. They don’t wait for Tarion to come in; they deal with these issues. That’s what separates out the good builders. Once they’re in the business for the long term, reputation means a lot.”
Margulies says concerns over the long-term viability of glass-walled condos have been overblown, and Denise Lash, who chairs the condominium practice at Heenan Blaikie LLP in Toronto, says consumers may be unduly deterred by the idea of disposable glass-walled buildings. Experts are working on improvements to insulation in glass wall systems, while other wall systems are not perfect, she says. “Although the window-wall systems may not last as long, if you get problems with pre-cast concrete, you could have a very expensive overhaul 40 years down the road, that’s going to cost more than it would to do the ongoing frequent maintenance of window wall systems,” Lash says.
In addition, she says reserve
fund requirements should help condos foresee potential issues and plan for dealing with them many years down the road. “Engineers will come in and assess the life expectancy of all these major components, which includes the window wall system, and they’ll come up with projections over a 30-year period of how much to contribute to reserve fund every year,” Lash says.
Even so, condo owners do not always react well when handed the burden of repairs or replacements through maintenance fee boosts or special assessments, and developers are frequently targeted in lawsuits. In Toronto, Concord Adex has faced more than one action from condominium corporations at its CityPlace development near the city’s waterfront, while failing floor-to-ceiling windows are at the heart of a suit involving Vancouver’s landmark Wall Centre. Some condo owners in the 10-year-old building were hit with special assessments of more than $100,000 to repair an allegedly deficient sealing job that allows air and moisture in through cracks. The total repair bill is estimated at $7 million, according to a CBC report.
Vancouver and B.C. are no strangers to condo lawsuits. The province’s “leaky condo crisis” reached a peak in the 1990s as the region’s damp coastal climate, combined with inadequate construction, left some developers, engineers, and architects in legal hot water. A 1998 commission of inquiry led by former premier Dave Barrett laid into developers, engineers, architects, municipalities, and regulators for their roles in the debacle, which affected thousands of homes and resulted in repairs in the billions of dollars.
Some of the original cases are still crawling through the courts, and the
episode has cast a shadow over the condo market in B.C., constraining growth while other real estate sectors boomed.
Although Toronto’s condo market shows no signs of stagnation, it may be in developers’ long-term interests to address concerns about glass condos. James Balderson, who runs B.C.’s Coalition of Leaky Condo Owners, says consumer confidence in condos has been permanently shaken on the West Coast, and he expects other regions to follow in the future. “Here, anybody with a brain is well aware of the leaky condo mess,” he says. “People are waking up all over the country to leaky rotten condos. This will be a problem long in the revelation, and it might go on for years and years as it did here.”
Stricter requirements in the new Ontario Building Code may force the hands of some developers in that province. As of Jan. 1, 2012, all high-rise buildings must come in 25 per cent above the Model National Energy Code for Buildings for energy efficiency, a previously voluntary standard. “If people actually comply with it, then that should inherently reduce the amount of glass you can put on a wall, because compliance is going to be a huge challenge with floor-to-ceiling glass,” Halsall’s Thompson says.
Lash doesn’t see a shift entirely away from glass in the near future because developers are guided by consumer demand for glass buildings that deliver affordability. Thompson would like to see an energy-labelling system for buildings. “Only then will we see the truth about how these buildings are actually performing. You’d get some competition suddenly, because builders will want to build something that gets a better label.”
Illustration: Joel Kimmel
When condo historians look back on the early 21st century, they may identify 2011 as the year Toronto’s love affair with the glass tower began to sour.
Illustration: Jason Schneider
This article is a continuation of "IP boutiques holding their own" from the January 2012 issue of Canadian Lawyer magazine. Click here to read Part One.

IP boutiques holding their own
Posted Date: January 03, 2012

When Philip Mendes da Costa started out at Bereskin & Parr LLP in the mid-1980s, intellectual property boutiques were small affairs. Twenty-five years later, “we’re now larger than some of the mid- to large-size firms,” says the firm’s managing partner. He says the 59-lawyer shop has grown in tandem with the increasing emphasis corporations are putting on their IP portfolios. “Back then, patents and trademarks were considered important, but not really central to the business of the company,” he says. “More recently, you’ve got companies who can receive more revenue from patent royalties than manufacturing products, and companies where the value of the IP portfolio or goodwill represented by the trademark portfolio is very significant, and stands out on the balance sheet. It’s of critical importance to make sure the IP strategy aligned with the business strategy.” For that reason, he says it’s natural that larger corporate firms are looking to get in on the action. “It’s not just a peripheral issue at the moment.æ
“[Boutiques] don’t dominate the field anymore like they might have done 10 years ago. Big firms have formed their own departments and the market has certainly become more competitive,” says one Bay Street practitioner, who says full-service firms are strong on the litigation and transactional side of IP law.
Another western Canada-based lawyer at a full-service firm says IP lawyers outside boutiques are still often overlooked because the field is so strongly associated with specialist firms. “Most IP practices, even in large firms, are run as mini boutiques. The IP department is run very differently from departments in other areas of law, because it really is quite distinct,” he says.
Mark Evans, managing partner of Smart & Biggar/Fetherstonhaugh’s Toronto office, says that the unique nature of IP law makes it difficult for large firms to match the depth of expertise boutiques can provide. Because the volume of IP litigation is not as high as in other jurisdictions such as the United States, firms need to branch out. Evans says some larger firms struggle to accommodate patent agents in their structure, or the specific file-handling systems IP demands. “We have our own proprietary systems and administrative features that are geared to that,” Evans says. “There are certain elements of IP that can be suited to general practice firms, but a lot of it is an uneasy fit.”
Despite the new competition, Mendes da Costa says IP boutiques have a long future ahead of them. “I don’t think it’s ever going to be subsumed into the full-service firm and disappear. We’re going to be here forever,” he says.
In employment and labour law, conventional wisdom says that large firms sop up the management-side work, while boutiques live off referrals when conflicts arise. But Erin Kuzz, co-founder of Toronto firm Sherrard Kuzz LLP, says there’s a lot more to it than that. “To be candid, our experience is a lot of the large firms have issues with billing rates. Some of the files that we do just can’t bear the billing rates that a large corporate commercial department might charge. I certainly understand that creates some conflict sometimes in the larger firms,” she says.
Paul Young, managing partner at Filion Wakely Thorup Angeletti LLP, agrees that price has been a key factor in the rise of the employment and labour boutique. He says new ones seem to spring up every year. “We just have a greater ability to be flexible in terms of fee schedules, which really makes us quite competitive,” he says.
And boutiques are cementing their positions by forming their own alliances across international borders to expand referral networks in an increasingly global business landscape. Young says the firm’s recent tie up with L&E Global, the Belgium-based group of 10 management-side employment boutiques, will bring in new work, as well as offering domestic clients with international business a ready-made panel of counsel in foreign jurisdictions. “You also get lots of ideas from the other firms in the alliance about how to attract new business, which leads to more entrepreneurial thinking,” he says.
Sherrard Kuzz also branched out last year, joining the larger Employment Law Alliance, which consists of 3,000 lawyers from 135 countries around the world. “Clients feel very well looked after,” says Kuzz. “I’d say it gives us bigger reach than some of the large firms, because they may not be willing to refer to firms around the world who may be competitors in other fields. We have no competition with the other members of the alliance, so it takes away that conflict issue.”
Our editorial team began the process of selecting Canada’s top IP and labour and employment boutiques by creating a short list of the most notable firms in their respective fields. From there, we drew on the experience of in-house counsel and large-firm lawyers who refer work to these boutiques, conducting a series of confidential interviews to identify the cream of the crop. The following results are an alphabetical list of the 10 boutique firms in each of the intellectual property and labour and employment categories that are most often called upon by other lawyers when stakes are high.
Illustration: Jason Schneider
When Philip Mendes da Costa started out at Bereskin & Parr LLP in the mid-1980s, intellectual property boutiques were small affairs. Twenty-five years later, “we’re now larger than some of the mid- to large-size firms,” says the firm’s managing partner. He says the 59-lawyer shop has grown in tandem with the increasing emphasis corporations are putting on their IP portfolios. “Back then, patents and trademarks were considered important, but not really central to the business of the company,” he says. “More recently, you’ve got companies who can receive more revenue from patent royalties than manufacturing products, and companies where the value of the IP portfolio or goodwill represented by the trademark portfolio is very significant, and stands out on the balance sheet. It’s of critical importance to make sure the IP strategy aligned with the business strategy.” For that reason, he says it’s natural that larger corporate firms are looking to get in on the action. “It’s not just a peripheral issue at the moment."
<< Start < Prev 1 2 Next > End >>
Page 1 of 2

Latest Videos

More Canadian Lawyer TV...

Digital Editions