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Inside the Toronto office of national law firm Heenan Blaikie LLP.

Fred Lum/The Globe and Mail

Law firm Heenan Blaikie LLP, home to several political heavyweights over the past four decades, plans a "major restructuring" in the wake of an exodus of partners and an uncertain climate in the legal profession.

The move by one of Canada's major firms, with more than 500 lawyers and eight offices across the country, as well as one in Paris, comes amid a slowdown in corporate deals and mergers that has also hit the bottom line hard at other similar groups.

The firm's partners met at a Montreal retreat over the weekend, unveiling the restructuring and pledging that there would be no interruptions in service to clients amid ongoing talks.

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"Discussions centered on restructuring and the future of regional offices across Canada," Heenan Blaikie said. "Partners across the country decided on the need to proceed with a major restructuring in the near future."

Asked later whether Heenan Blaikie will continue to operate under its current name, Norman Bacal, a former national co-managing partner at the firm, said in an e-mail response that "that is one of the issues we are examining."

More partners were to be expected to leave. Some groups of lawyers from the firm could end up joining with an international firm based in the United States or Britain, sources said.

Heenan Blaikie is home to former prime minister Jean Chrétien and Donald Johnston, a Trudeau-era cabinet minister and, later, secretary-general of the Organization for Economic Co-operation and Development.

The law firm was also home to the late Pierre Trudeau after he left politics, and still boasts the likes of former Quebec premier Pierre-Marc Johnson and former Supreme Court of Canada justice Michel Bastarache.

The firm has lost at least 30 partners since 2012, with several leaving in just the past few weeks. It said previously it was going through a "strategic review" and "right-sizing," acknowledging that last year was a challenging one financially, and that it delayed certain payments to partners out of "prudence."

Heenan Blaikie's troubles, which also cloud the future for hundreds of support staff, come as industry observers warn that more law firms can be expected to shrink.

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Many others, particularly those such as Heenan Blaikie, that rank just below Bay Street's top tier, have cut back on hiring new lawyers and law students, an increasing number of whom in recent years have failed to secure articling jobs.

Law firms of all kinds have faced increasing pressure from clients since the financial crisis to rein in spiralling legal costs, and bring in new management methods, outsourcing and new technology in order to make legal bills more affordable.

Mr. Chrétien, reached at his Ottawa home, had little to say about his law firm's plight. He is counsel to the firm, and not a partner, and said he did not know what was transpiring: "I hear lots of rumours, but I have no comment. I have absolutely nothing to do with decisions on that. I've told them [Heenan Blaikie] that I'm working month to month. At my age, I just want to be useful."

The last time a major Canadian firm saw partners flee in such numbers was in 2007, when mid-sized Toronto firm Goodman & Carr shrunk from 140 to just 90 partners in the face of increasing pressure before shutting down.

In an interview earlier this month as the departures mounted, national co-managing partner Kip Daechsel said Heenan Blaikie was financially sound and that it had also recently hired about 20 lawyers, including seven with the rank of partner or counsel. He said billing levels were "much more encouraging" since November.

Heenan Blaikie has been spending money on renovating its Montreal and Vancouver offices and moving into new quarters in Sherbrooke, Que.

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Heenan Blaikie's history dates back to 1973, when Mr. Johnston, a Montreal lawyer, formed the firm with Roy Heenan and Peter Blaikie.

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About the Authors
Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. He spent six years as the law reporter in The Globe’s Report on Business, covering Bay Street law firms and writing about fraud, insider trading and corporate tax avoidance. More

National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More


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