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Saskatchewan has come a long way, baby

|Written By Geoff Kirbyson

The longtime, have-not province and economic weakling has developed into a powerhouse over the past few years, recently posting a $425-million annual surplus while most governments are drowning in deficit. At the same time, Saskatchewan continues to boast the lowest unemployment rate in the country at 5.2 per cent coupled with strong wage growth. Employment is forecast to grow by 8,000 jobs this year, or 1.6 per cent, the largest increase in the country. (Every other province except Manitoba is projected to lose jobs this year.) A year ago, Saskatchewan’s oil industry was flush with cash. Today, its potash sector is rolling in it.

In short, it has created an economy that is not only the envy of every other province in the country but it just might have the right recipe to be recession-proof.

As good as things are today, there’s nothing on the horizon that points to a reversal of fortune. The Conference Board of Canada recently predicted Saskatchewan would lead the country with 1.6-per-cent GDP growth in 2009, well ahead of the 0.5-per-cent decrease forecast for the entire nation. Saskatchewan’s performance has even caught the attention of news giant CNN, which recently posted a feature story on its web site in which it called the province a “jobs hot spot” in Canada.

The province’s legal industry is only too happy to soak up the seemingly never-ending good vibrations.

Jeff Grubb, Regina-based partner at Balfour Moss LLP and a member of its management committee, says people in the province are optimistic the good times will continue to roll but they’re well aware that Saskatchewan isn’t permanently immune to what ails the global economy. “Our economy is defying a bit what’s happening in the rest of the world. We don’t want to say that too loudly,” he says. “Businesses are still expanding and growing here. The offshoot of that into the legal market is good as well. We’re not seeing a lot of new kinds of industries but [existing] businesses are doing more, more people are coming into the province, and they’re buying more real estate. There’s more litigation as well because there’s more activity and more people.”

Don Wilson, managing partner of MacPherson Leslie & Tyerman LLP, says the firm’s four offices, two in Saskatchewan and two in Alberta, are doing relatively well but for different reasons. He says things are far from perfect — some clients have laid off employees or delayed or even cancelled projects — but the diversity of the firm’s practice areas in Regina and Saskatoon helps. “The [industries] that make our economy kick are generally thought to be [industries] that will come out of the recession sooner. The world still has to eat so there’s every reason to think agriculture-based industries will bounce back faster than others. The same could be said for uranium and the production of clean energy. They’re all thought to have very good fundamentals.”

Wilson says even if there are downward “blips” in these sectors, they won’t impact the province in the same way that the automotive or manufacturing sectors will in provinces such as Ontario. “I think the reality is there has been some impact but relative to other places, it has been relatively minor,” he says.

The local market continues to be “quite good” and all of his firm’s 22 lawyers have a steady stream of work, says Chris Donald, one of the managing partners of Robertson Stromberg Pedersen LLP in Saskatoon. He says the firm’s corporate commercial lawyers are busier than they were a few years ago, which he considers the bellwether test for how the economy is performing. He says commodities-based lawyers were very busy until sectors such as mining went south last year. To compensate, business has picked up on the construction and infrastructure sides.

“The work we’re doing is of a higher quality than it was a number of years ago. The transactions are more complicated,” says Donald, noting one of the firm’s lawyers has even carved out a significant niche in the class action field. He stopped just short of saying Saskatchewan’s legal sector was invincible. “Maybe the litigators might be able to say [they’re recession-proof]. When things get bad, that’s when people start suing more. Our insolvency folks will be busy in downturns. Saskatchewan has a stronger economy, there’s a whole lot going on. New businesses are coming in, the province is trying to make up the infrastructure deficit, people are moving in, towns need to allow developers to come in and build subdivisions. All of that is working to keep lawyers busy,” he says.

The Saskatchewan legal community is in a “very comfortable” position, says Keith Boyd, a partner and member of the management committee at Kanuka Thuringer LLP in Regina, because it built its base on local businesses before expanding to national and international clients. He admits there has been a slight drop off for legal services, but that’s coming off arguably an all-time high. “Our peaks and valleys aren’t far apart. During the last 18 months, I don’t think I’ve experienced as strong a demand for our services,” he says.

As positive as so many of the developments are, it’s not all wine and roses, says Gordon Wyant, Saskatoon-based partner at McKercher LLP. With population growth — the province recently topped the one-million-person mark — come problems associated with larger cities, such as crime. While that might make for negative headlines, the legal community benefits when the ne’er do wells get busy, he says. “There’s a lot of property crime with a booming economy. That attracts a lot of people who want to take advantage of those opportunities. We see growth from a legal perspective in the criminal area because more charges are being laid,” he says. “Criminal lawyers tend to be busy as the economy starts to grow and also when the economy is falling.”

Wyant says despite the fact capital spending has slowed virtually everywhere else, the purse strings are still loose in Saskatchewan. Perhaps the biggest buzz is centred around a development called River Landing in Saskatoon. When complete in several years’ time, it will include a hotel, a residential development, office space, and a new performing arts centre all along the South Saskatchewan River. “We’re going to create a people place. It has created lots of enthusiasm in the city. We’ve seen a lot of people moving to Saskatoon and property values have increased dramatically over the past 18 months. Our rental rates are being driven higher as well,” he says.

“Exciting things are happening for our province and exciting things are what lawyers like to do. We like to be involved in projects that are going to have a long-term impact on the province,” says Boyd.

Wyant says he realizes Saskatchewan can’t dodge global recessionary bullets forever. “There are always storm clouds when you talk about the economy. We’re not so blind as to think what’s happening to the rest of the world isn’t going to affect us but we’re still looking at growth in Saskatchewan in 2009 as people look to the province as a good place to invest, a safe harbour, and a good place to do business,” he says.

Wyant says McKercher doesn’t have any capacity issues in terms of its lawyer count, which currently sits at 65 in its Regina and Saskatoon offices. When opportunities to hire associates or partners with a particular expertise spring up, the firm looks at them “very seriously,” he says. “Nobody is starving in Saskatchewan if they’re a lawyer.”

With so much activity heating up in the province, a growing number of firms have spread their wings internationally to service their increasingly global clients who are based in the 306 area code. Grubb says law firms have had to follow the lead of these clients or risk losing them. That’s why Balfour Moss joined Meritas Law Firms Worldwide, an international association of business-focused law firms. “If I have a client in Saskatoon who has a need in South Africa, I can refer him to a lawyer there that we have confidence in. Meritas recruits specific types of firm[s] and there’s a quality insurance component that gives everybody within the group a comfort level,” he says. “It’s a competitive issue; it’s something you need to do to serve your clients.”

Wyant says McKercher recently developed a marketing initiative with two of its lawyers, both born in China, to pursue two-way legal opportunities. “There is lots of investment from China that wants to come to Saskatchewan. I have a client who has significant interests in China and having our two lawyers provides a great advantage. We can provide the experience on the ground in Saskatoon. For Chinese investors who want to come to Saskatchewan, we can provide that expertise, too,” he says.

More of that expertise is choosing to be based in the province, too. While Saskatchewan was a net exporter of legal talent, Grubb says the trend is changing. “We’re starting to recruit from outside the province and we’re starting to get more applications from lawyers looking to come back to Saskatchewan or move here for the first time,” he says.

Grubb says while Regina and Saskatoon are the obvious hubs for legal work, firms in other communities such as North Battleford, Prince Albert, and Lloydminster, are busier than ever and are having difficulty finding lawyers to handle the work. It’s a good problem to have, he notes, but a problem nonetheless.

Boyd says Kanuka Thuringer’s 33 lawyers in Regina and Swift Current continue to be busy in the oil and gas, and potash sectors. He says because the province’s population is growing, the slight decline in demand in certain sectors has been offset by the new arrivals to Saskatchewan.

About 25 of MacPherson Leslie & Tyerman’s 105 lawyers are located in Alberta, where Wilson says the firm’s focus on medium-sized businesses has allowed it to avoid being caught in the downturn hitting many of the province’s largest companies. “Our clients there tend to be less impacted by the severe drop in activity in the oil patch than some of the bigger firms. Our sweet spot isn’t those huge multinational companies,” he says.

Wyant says even though many opportunities lie outside the province’s borders, he says McKercher hasn’t lost sight of its lifeblood, the local economy. “There are still some tremendous opportunities to grow locally. Local businesses are growing and we certainly haven’t turned a blind eye to what’s happening in Saskatchewan. As Saskatchewan starts to be a significant player internationally, that’s changed how we practise law. We have many international clients now, 25 years ago, we didn’t,” he says.