Money isn’t everything when it comes to the law. Much like possession, it’s about nine-tenths of it. For the Money Issue, Michael McKiernan looks at the most potentially lucrative practice areas for individual lawyers, as well as the hottest fields where every law firm is scrambling for a piece of the action.
According to Carrie Heller, the president of legal recruiter The Heller Group, specialization is the key to a lucrative legal career. “Certain lawyers have managed to really carve out a niche, where they have expertise that few others have, and that is where you’re going to be able to charge the highest hourly rate,” she says. “It all depends on how good you are, how much of a niche you’re in, and how respected you are.”
In the search for that crucial area of expertise, she says lawyers have to follow their hearts. “Go for an area that you’re really interested in, because that will lead you on a path where you’re going to excel, and hopefully then you’ll make more money. You have to have a strong passion for what you’re doing to build a very strong practice,” says Heller.
But some niches are more reliable than others when it comes to cold, hard cash, and we’ve identified some beacons of success for those with hearts persuaded by a more financial passion.
M & A
“Deal work is the corporate engine of a lot of law firms, and that’s where a significant amount of their revenue comes from,” says Susan Kennedy, managing consultant in the Toronto office of ZSA Recruitment. “If money was your aim, I’d say go into M&A because that can be quite lucrative.”
Most industry observers would agree. They report hourly rates that have shot through the four-figure barrier for the cream of the M&A crop, with at least one Bay Street lawyer billing $1,050 an hour.
According to Kennedy, some may be put off by a career in M&A for fear it puts them too much at the mercy of the markets, especially following the recent credit crunch and its continuing reverberations. But Sharon Geraghty, the co-head of the M&A practice group at Torys LLP, says the area’s significance has actually surged since the financial crisis. “In recent years, the capital markets have really slowed down in Canada. Before that, we also had a big income trust phase that was an incredibly active area of practice, before the government shut it down from a tax perspective, so I think M&A has started to take on even greater importance,” she says. With large financial players waiting it out on the sidelines until we hit calmer economic waters, high-end firms like Torys have been able to sustain a mergers practice with a series of strategic deals.
Geraghty says a good M&A lawyer must learn to juggle moving parts and multiple viewpoints. She cut her teeth on the Royal Bank of Canada’s 1993 merger with Royal Trust, and currently represents TMX Group Inc. in its discussions with Maple Group, a consortium of 13 financial institutions. “It’s one thing to sit in your office and come up with a great solution to a technical problem, but you have to come up with a way for it to work for the other side, because otherwise, you’re not going to actually complete the deal,” she says.
Both Geraghty and Kennedy say the outlook is bright on the deal front in the near future. “I think it’ll come back. I’ve been recruiting for a long time, so I’ve seen it down and then go back up again,” says Kennedy. “The other thing too is it’s a very marketable skill set, so if you want to transition to an in-house role, it’s a lot easier to do than some other specializations.”
Canada’s tax code comes with a reputation that intimidates a lot of lawyers, but Borden Ladner Gervais LLP partner Steve Suarez has always found himself drawn to the challenge. “Everyone seemed to be afraid of tax because it was so complicated, and nobody wanted to do it, which did give it a certain appeal at law school,” he says. “I thought there was no reason why I couldn’t figure it out if I put my mind to it, and it’s been a rewarding decision for me.”
According to ZSA’s Kennedy, clients will pay a premium for top-tier tax lawyers precisely because of the complexity that scares so many off, as well as the amount of money that can be saved from an efficient tax plan. “Tax is such a complicated area that I would say a senior tax practitioner would charge a pretty significant billing rate, just because of the years of experience and layers of complex knowledge that goes into it,” she says. And the most experienced lawyers in the tax field are now frequently charging clients between $800 and $1,000 an hour.
Suarez points out the fluidity of tax law also keeps practitioners constantly on their toes. “It’s not like a corporate statute or a securities statute that you can pick up from year to year and not see much change. There’s draft legislation that comes out literally every year, and the federal budget has always got something, plus one or two technical bills during the year with various new initiatives,” he says. “During the first two or three years of practice you find yourself doing a lot of very discrete research projects on specific topics, and it’s really only after you’ve done a few years of continuous practice that the dots start to connect and the bigger picture starts to develop of the whole scheme and how it ties together.”
Tax law at a large firm tends to be dominated by transactional work, says Suarez, who estimates about two-thirds of his work is related to deals. The remainder consists of advisory work for corporate and individual clients.
He says lawyers may have to fight for their fees in the future as accounting firms step up competition to the profession in matters of tax. “In the years to come we have to figure out how we can continue to do what we do in a way that is competitive and ultimately better than people outside the profession,” he says.
Lawyers and firms specializing in class action law have shown that you don’t need to be a Bay Street lawyer to rake it in. But there’s great risk along with the possibility of great reward.
When the Canada Revenue Agency recently handed over anonymized data about the salaries of private practice lawyers to the Department of Justice as part of its process for determining judicial salaries, it showed that Canada’s highest-paid lawyer lived outside the country’s 10 largest cities. Observers suggested that kind of mammoth payday could only come from high-risk, high-reward contingency-fee litigation, and in fact, many assume the $8-million man is Windsor, Ont. class action legend Harvey Strosberg.
At London, Ont.’s Siskinds LLP, partner Dimitri Lascaris is no stranger to high-stakes action. The former securities law associate with U.S. giant Sullivan & Cromwell LLP took a nine-year sabbatical from the practice of law to join a professional blackjack team that toured the world extracting money from casinos with perfectly legal card-counting tactics. But as the team’s notoriety grew, their career spans shortened: “We had experiences where we were barred from premises without having played a hand,” says Lascaris. In any case, he says he was ready to go back into a line of work with a little more “social utility.”
“It wasn’t much more than a wealth transfer from casinos, who admittedly deserved to have their money taken, because they’re pretty bad in terms of what they do for society,” explains Lascaris. So he came up with an idea to launch a class action against casinos for their allegedly intimidating and exploitative practices against consumers, and started shopping the idea around Canadian class action firms. Siskinds took a liking to Lascaris, if not his casino idea, and helped him on his pioneering path in securities class actions.
The huge sums involved in some class action cases make for potentially massive windfalls for the plaintiff lawyer and law firms that lead them, but Lascaris is careful to hedge his bets. “Professional blackjack players want to get into the long run as quickly as possible, so they try and play as many hands as they can. The parallel to the class actions bar is it’s dangerous for someone to embark on this type of practice and put everything into a single case or a small number of cases. You have to have a significant number of cases on the go, and preferably of a diverse nature, so you’re not destroyed by one loss."
Another way for lawyers to boost their value is to practise in a popular field that has every law firm yearning to get in on the action, or if they’re already there, to get a bigger piece of the pie. John Ohnjec, an Ottawa-based division director at Robert Half Legal, says a solid, portable book of clients can translate into a profitable lateral move. “Law firms are looking not so much for junior associates, but more the mid- to senior-level individuals. They need to bring in people that are senior enough that they have the capabilities, and they can bring business in,” he says.
That’s particularly true in a still uncertain, and at times volatile, market, says recruiter Carrie Heller. “It’s a market that is going up and down quite a bit and I think it’s in conjunction with what’s going on in Europe with places like Greece and Portugal. Everyone is on the sidelines, waiting to see how this will all play out before they make some major hires,” she says. “No matter what market we’re in, firms are always looking for talented lawyers, but a solid book is extremely marketable right now. People are looking for a strong portable practice to strengthen their own firm.”
Following are a few of the fields where firms are keen to bring in new talent.
The yin to M&A lawyers’ yang, the current popularity of insolvency law reflects uncertainty in the markets. According to a Robert Half Legal survey released in March, restructuring and insolvency was one of the top three areas in which law firms planned to hire new lawyers. “I’m certainly finding quite a few firms looking for insolvency expertise. And a lot of companies are in the process of restructuring,” says Heller.
Derrick Tay is one of those in-demand lawyers who recently switched firms. At the turn of the year, he left Norton Rose Canada for Gowling Lafleur Henderson LLP, bringing with him the Nortel Networks Corp. file that has occupied much of his last three years. “Gowlings committed to build a practice that would have a significant presence in the type of work that I want to do, which is that top-tier, multi-jurisdictional insolvency,” he says.
Before Nortel, Tay was debtor’s counsel to Quebecor World Inc., the printing subsidiary of the communications heavyweight, and has recently added a role as monitor’s counsel in the Sino-Forest case. He started out in banking and built a reputation in the insolvency area after handling a number of cases stemming from bad loans made by his banking clients. Increasingly complex cases came his way, which he says now insulate him from the fluctuations of the market. “In bad times, you find real estate lawyers, general corporate lawyers, everyone is touting themselves as insolvency lawyers. In good times, those dabblers go back to whatever they do, and the key insolvency people still tend to get a good piece of the action, because there’s always some insolvency going on.”
Still, true to type, Tay foresees plenty of business for the dabblers in the near future. “Times are getting harder again, despite what the governments want you to believe. I think there’s a lot of systemic problems in North America, and it’s only a matter of time before the cracks start to become unsustainable and the work starts to pour through,” he says.
Commercial real estate and infrastructure
Jeff Merrick could hardly have timed his 1991 call to the bar worse. Having completed his articles at the Toronto office of Blake Cassels & Graydon LLP, and settled on the firm’s real estate practice group, Canada’s real estate market, and particularly Ontario’s, tanked. “O&Y [Olympia and York], one of the big developers, went bankrupt and all the Canadian developers went through some really tough times,” he says.
Within a year, Merrick had jumped ship to Vancouver, where Blakes had a newly established office, and has never left. “I snapped up the opportunity. I was able to join a growing office and help establish a real estate practice in a market that was not nearly as depressed as Toronto’s,” says Merrick.
According to Heller, the field’s fluctuating fortunes have resulted in a shortage of qualified lawyers in commercial real estate. “There’s this gap for the mid-level real estate lawyer. It’s an ongoing issue, that there just weren’t enough people getting into it at some point, so the firms are missing that mid-level real estate type of lawyer,” she says.
And things are looking up again for those few lawyers who fit the bill, says ZSA’s Kennedy. “Commercial real estate is crazy busy for me right now,” she says. “Everyone is trying to find associates, because most of the law firms are very thinly staffed there.”
Merrick’s timing was better in 2002 when he stumbled into one of the earliest public-private partnerships in Canada, through a client shortlisted for the construction of the Vancouver General Hospital’s Academic Ambulatory Care Centre. “They came and asked me did I know anything about P3 development. I said no, which was the answer they’d been getting from all the lawyers they talked to. So I started reading up and got involved,” Merrick says. Now P3s account for about 60 per cent of his work.
After a blip during the financial crisis, when the high-profile Port Mann Bridge project was pulled from the P3 process, the provincial government-owned Partnerships B.C. re-established itself as a Canadian P3 powerhouse alongside Infrastructure Ontario, and foreign banks increasingly entered the market with financing.
Dal Bhathal, CEO of The Counsel Network, a legal recruiting firm with offices in Vancouver, Calgary, and Toronto, says she’s been struck by the level of activity in the area. “P3 has always been quite busy over the last five or six years, particularly in Vancouver, but we’ve really seen it pick up over the last two years,” she says. “Engineering and construction companies have been growing their legal departments and law firms have been hiring a lot in the area, too.”
“A number of law firms are waking up to mining,” says Jay Kellerman, a partner at Stikeman Elliott LLP with more than 20 years experience in the area who leads the firm’s global mining group. “Some have been a little late to the game, but they’re doing well and developing business, which is good for everyone. It’s important because of the transaction value of the industry and its importance to the Canadian economy as a whole.”
He sees mining as a key factor in the Norton Rose Group’s arrival in Canada. At the same time as its merger with Ogilvy Renault LLP in 2011, the firm also tied up a deal with Deneys Reitz in South Africa, another mining hotspot.
Mining is a global business with a strong Canadian flavour, says Brian Abraham, the national co-chairman of Fraser Milner Casgrain LLP’s mining group. He estimates more than 50 per cent of the world’s junior mining companies are based in Vancouver, where he has his office. Very few of them have their assets in Canada though, which means that 75 per cent of his work is international. “Right now, I’m doing deals in every continent except Antarctica, which is off limits to mining, so I don’t think I’ll ever do a deal there,” he says.
Abraham studied geology at university and keeps up his membership in the Association of Professional Engineers and Geoscientists of B.C. He says the technical knowledge has given him a leg-up in the field during a long career, and welcomes the recent influx of fresh talent after periods in the doldrums. “For years nobody did any mining work. It was considered a sunset industry, which I never believed. Long term, the industry is looking good, because we can’t do without metals,” he says.
Bhathal says recent demand for lawyers in the area has sustained a high level. “Over the last couple of years, mining has been very active, and that has continued so far this year,” she says.
“When you look at the top deals, there’s a lot of mining transactions. It’s still a very busy area and I haven’t seen any signs that it’s going by the wayside,” says Kennedy.
Kelly Friedman’s career as e-discovery counsel was kick-started when a complex trial unexpectedly settled at the last minute, leaving her with a six-month gap in her schedule a decade ago. She convinced her firm to let her travel to an e-discovery conference in New York, giving her a head start on the burgeoning practice area that allowed her to escape the horror stories that come with most lawyers’ first experience. “Most people learn by making some terrible mistakes, or having it thrown at them. I’m lucky I never had that disaster, because I learned so much, and took it on as a pet project before I had a major issue on a file,” says Friedman, a partner at Davis LLP.
At that time, e-discovery as an issue had barely reached Canada, and while it has now gone mainstream, and Ontario’s Rules of Civil Procedure now reflect best practices developed by Sedona Canada, Friedman is still among a relatively select group of experts in the field.
“Most lawyers associate e-discovery with document review, and managing that process in a cost-effective and efficient way,” says Dera J. Nevin, e-discovery counsel and senior director of litigation support services at McCarthy Tétrault LLP. “That is certainly an important part of an e-discovery counsel’s role. However, there is also a real need for counsel who are experienced in information governance and preservation in order to effectively manage the collection and preservation process. And as companies go global and personal and corporate technologies merge, there are legal issues associated with privacy and data mobility that require resolution.”
Another Robert Half Legal survey from March revealed e-discovery services are in demand: a third of law firms planned to increase spending on e-discovery over the next two years. Many are operating from a very low baseline, with 27 per cent of respondents saying their firm had no standard procedure to manage discovery requests.
According to Friedman, project management is a large part of her job. Instead of allowing a dump of documents to be batched out at random to reviewers, she targets those that are most likely to be relevant, and groups the resulting disclosure by subject matter and time frame before sending them out to reviewers. “That way they can become an expert on that area and know what’s important and what’s not,” she says. “I always talk about how you strategically use e-discovery principles to keep costs down, be really efficient, and produce quickly, so you can negotiate and get to a quicker resolution. Clients have pushed back. They won’t just write you a blank cheque to allow you to spend two years going over documents.”
Nevin agrees that proper attention to e-discovery plans ahead of time can save money for parties in the long run. “The majority of my work is strategic, and frequently occurs far in advance of any collection. In litigation and investigations, I work with clients and litigation teams to sharpen the focus both of preservation obligations and collection efforts, and ensuring the parties’ discovery plans are documented. Early attention to e-discovery issues can significantly lower costs for litigants parties, and ensure the litigation team has up-front access to critical documents required for case analysis.”
Compliance and regulatory law
With companies under the increasing pressure of regulations, lawyers are finding experience in compliance particularly marketable. In her field, Sharon Geraghty says Investment Canada and the Competition Bureau are taking a much closer look at transactions. “There is a lot more focus on regulatory approvals. We’re seeing that across the board in Canada, in a way we didn’t in the past, so that plays a much more significant role in the work we do,” she says.
John Ohnjec of Robert Half says in-house lawyers place a premium on backgrounds in compliance and regulatory law, and that law firms are following their clients, favouring associates with similar experience. “Corporate employers value lawyers with three or more years of experience who possess a working knowledge of statutory and regulatory structures of the government process by which regulations are enforced. They seek lawyers who can develop compliance policies so that the company adheres to laws, regulations, policies, and standards at both the municipal and government level,” he says.
With an ever-changing regulatory environment, “ensuring a business is operating within established policies and standards can be an ongoing and challenging task, which is why compliance lawyers remain so valuable,” says Ohnjec.
And it’s not just close to home where scrutiny is increasing. John Boscariol, the head of the international trade and investment law group at McCarthy Tétrault, advises clients on compliance with economic sanctions, international trade agreements, and anti-bribery laws. He helps clients with “compliance convergence,” bringing together the compliance function across a number of different issues
“The same tools you use for anti-corruption practices to do background checks on agents that are representing you in another country, can be used to make sure you’re complying with economic sanctions,” he says. “Companies are starting to understand that a lot of these regulatory compliance issues can be dealt with in a similar fashion using similar tools internally, and realizing efficiencies from doing that, rather than operating separate silos within an organization.”
He says companies are increasingly concerned about complying with international trade regulations because of the reputational damage a breach can cause. “With the Arab Spring, we saw so many dictators overthrown and when that happens, a light gets shone on all the previous dealings with those dictators. That can put you in a pretty difficult position reputationally,” says Boscariol.