Blake Cassels & Graydon LLP has cut its Ottawa office staff to just four lawyers, according to a source.

Since the economic downturn, firms have been looking at which practice areas are in demand and tried to reshape their businesses accordingly, says John Ohnjec.

At least 10 lawyers lost their jobs within a roughly one-month period, said the source, a senior litigator who asked to remain anonymous. The firm’s web site last week showed 16 staff members at its Ottawa office.

A Blakes spokeswoman declined to comment when reached by Law Times.

The remaining lawyers are the top producers in the office, said the source, adding all other staff members, including clerks and secretaries, also lost their jobs. “It can only [be] assumed that the office was insufficiently profitable,” said the source.

With 12 offices in Canada and around the world, Blakes is one of the largest law firms in Canada. Locally, the firm has offices in Toronto, Montreal, Calgary, and Vancouver in addition to the Ottawa location. It also boasts offices in the Middle East, Britain, China, and the United States.

Lawyers at Blakes’ Ottawa branch, the firm’s smallest office in Canada, work in areas such as technology, government procurement, and securities regulation.

While Blakes remains mum on the issue, the incident is a reminder of a previous downsizing at McCarthy Tétrault LLP in 2009. In that case, the firm closed its Ottawa office altogether.

But while business has improved for many firms since then, the news of more downsizing doesn’t come as a surprise to John Ohnjec, division director at Robert Half Legal.

“It’s all part of the re-evaluation,” he says.

“While I don’t think that necessarily downsizing is the trend, I think the definite trend is to look inward as to what their model is and what’s working and what isn’t working and in some cases that will entail the need to downsize, to become leaner while still being able to service their clients.”

Since the economic downturn, firms have been looking at which practice areas are in demand and tried to reshape their businesses accordingly, says Ohnjec. “Maybe the city of Ottawa isn’t perhaps best suited to deal with [certain practice areas] and maybe some of their other offices are best for that.”

Difficulties in the technology sector in Ottawa have had a major impact on the legal business scene there, says Jordan Furlong, a partner with global consulting firm Edge International.

Government cutbacks have exacerbated the impact, he adds. “Ottawa is government first and tech centre second. Those two have been the drivers and if they’re not driving at full speed, then the legal market is not going to drive at full speed either.”

With overhead costs that haven’t decreased with revenues, “It’s a question of how many lawyers, particularly how many full-service commercial law firm lawyers, any given centre can sustain,” he notes.

The 2011-12 federal government spending records showed no payments to Blakes’ Ottawa office. (The public accounts only indicate individual firm payments exceeding $100,000, meaning Blakes could have done work for amounts less than that.) In the previous year, the public accounts report payments to Blakes’ Ottawa office of $275,000 in legal fees for work done for the Privy Council Office and the patented medicine prices review board.

But the government paid Blakes’ Toronto office nearly $400,000 in the past year for legal and management consulting services provided to the Justice Department and Public Works and Government Services Canada.

Looked at as a whole, the legal business in Canada is showing a recovery, says a 2011 report by Robert Half Legal.

“In fact, a majority of senior lawyers are optimistic about their organization’s business prospects,” the report stated.

“Small and boutique firms specializing in high-demand practice areas such as litigation, business, commercial law, bankruptcy and foreclosure, and health-care law are seeing increased profits,” the report noted.

The same report found that “although law firms were forced to reduce staff in the past few years, retention of top performers has remained a priority.”

In Ottawa, litigation and intellectual property are strong practice areas at the moment, says Ohnjec.

“The smaller firms have been through what all firms in Ottawa and across the country have been through in the tough times and that’s decrease in the amount of business they’ve seen perhaps in the last four or five years.

“They are all having to re-evaluate their model and wanting to learn and come out ahead.”

While it’s clearly not among the largest legal centres, Ottawa isn’t a trifling one either, says Furlong, adding it might be an interesting city to watch as large firms restrategize.

He pauses and asks, “What do you do with Ottawa?”

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