Local lawyers transform Heenan Blaikie breakup into new law firm

Mark
Mark Brownlee
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Out of the wreckage left behind by the dissolution of Canadian law giant Heenan Blaikie, a group of Ottawa lawyers are crafting a new business model for the legal community.

David Taylor, Caroline Etter and Mark Power are the partners at Power Law.

Mark Power and David Taylor were, until recently, lawyers in Heenan Blaikie’s Ottawa office. But the two have now started their own company, Power Law LLP, along with several other partners following the larger firm’s decision earlier this month to wind up its operations.

“The dissolution of a major national firm was perhaps a blessing in disguise, perhaps a golden opportunity to change things up and perhaps experiment with a different business model,” said Mr. Power. “If not now, then we’re not sure there would ever be a better time.”

He said they’re planning to craft the new firm around targeting clients – including some former Heenan customers – who may not be able to afford the sorts of billing fees that bigger competitors charge.

To do this, they plan to cut down on two major costs that traditionally eat into a law firm’s balance sheet: salaries for lawyers and office space.

Mr. Power said the firm will focus on bringing on lawyers who are willing to take home smaller salaries in exchange for getting the chance to work on files that they find most rewarding.

The new practice also plans to offer its employees benefits that other firms may not have, such as longer vacations or more flexibility on maternity leave.

Power Law is also banking on saving a lot of money on its premises. The two lawyers said the firm’s office space at 130 Albert St. will incur less than one-third of the cost per lawyer for space at Heenan Blaikie’s old office at 55 Metcalfe St.

Mr. Taylor said he understands that expensive office space serves a purpose by projecting a positive image to clients. But he believes they can make do with office space that’s smaller and more modest than what they’re used to.

He said the front portion of the firm’s new space will be a good space to meet with clients, while the back offices where lawyers work will be more utilitarian. It will also have fewer boardrooms than a lot of other law firms.

“There’s no reason that I need ... a marble desk or gold-plated handles in the kitchen,” said Mr. Taylor.

The collapse of Heenan Blaikie comes at a time when the legal community is facing significant upheaval.

Clients are less willing to spend on legal fees than they used to be, said Mitch Kowalski, who was a visiting law professor at the University of Ottawa when the news broke about Heenan Blaikie.

Many companies that need legal services are breaking up the work, he said, sending some to  offshore companies and others to people who aren’t fully accredited lawyers.

This creates an ideal space in which firms like Power Law can compete, said Mr. Kowalski. He predicts that there are going to be more lawyers who approach it this way in the future.

“If some of these smaller (law firms) can get together and rethink their cost structure, then they can make legal services a lot more affordable,” he noted.

“They can go to the startups and the companies who don’t have a lot of money at this point in time but may at some point down the road. It may be very attractive.”

That doesn’t mean there aren’t potential pitfalls for Power Law.

Mr. Taylor said he’s worried the business model may become a victim of its own success. If more lawyers start smaller companies like this, it may saturate the market and create too much competition.

Indeed, other local law firms are already finding success in this space. For example, Hugues Boisvert started his boutique legal firm, HazloLaw, in 2011 and grew it to seven lawyers less than a year later.

Another potential issue involves getting the firm off the ground. Mr. Power said he wants to make sure Power Law will be able to devote enough attention to the clients it is bringing over from Heenan Blaikie as the firm goes through its setup phase.

However, he said they already have a plan for tackling one of the big advantages that larger law firms have over the fledgling practice: a presence in a large number of cities.

Three of the firm’s lawyers are coming over from Heenan Blaikie’s Vancouver offices, said Mr. Power. They also plan to partner with similar-sized firms in other cities so they can service clients who do business across the country.

Sidebar: Firm’s demise ‘a shock’

Many members of Canada’s legal community were left scratching their heads at Heenan Blaikie’s announcement in early February that it was going to wind down its operations.

And that includes members of the firm’s Ottawa office.

Power Law co-founder Mark Power said most of what he knows about the reasons for the firm’s collapse he’s garnered from accounts in the media.

“For me, it was certainly a shock, especially with how quickly it seemed to happen,” said Mr. Taylor.

Mitch Kowalski, a visiting law professor at the University of Ottawa, said he wasn’t sure of the specifics but speculated that it had to do with both financial concerns and a potential dispute between the firm’s various partners.

Organizations: University of Ottawa

Geographic location: Ottawa, Vancouver, Canada

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  • Kelvin Holmes
    February 27, 2014 - 05:44

    An interesting perspective on the business of law. My sense is there are a great many challenges facing law firms including knowledge transfer, recruiting & retention, business development, space utilization etc. expect to see more off this type of evolution in the legal community.