The Norton Rose Group has shaken up Canada’s legal marketplace for the second year running after planting roots in the West by sealing a merger with Calgary-based Macleod Dixon LLP.
The deal, which closes on Jan 1., 2012, will see Macleod Dixon join forces with Norton Rose OR LLP for a combined total of more than 700 lawyers in Canada.
That will make the new firm, which will be known as Norton Rose Canada, the third largest in the country. Worldwide, it takes Norton Rose to a total of 2,900 lawyers in 43 offices.
“I believe this changes the legal landscape in Canada,” says John Coleman, managing partner of Norton Rose OR. He describes the merged firm as a “new Canadian powerhouse.”
According to Coleman, Norton Rose has been looking for a stronger foothold in Canada’s energy and resources capital since landing on these shores last November with the blockbuster announcement of its move for Ogilvy Renault LLP.
Montreal-based Ogilvys opened its first Calgary office in January 2010, but most of its lawyers are concentrated in Ontario and Quebec.
“Certainly, we were small in Calgary — with very strong practitioners but still small,” says Coleman. “The depth that Macleod had and the client base that they have in Calgary is second to none. It’s a perfect fit East-West for us.
Macleod’s strength in energy and resources fits nicely into what we are doing in Canada,” Coleman says. “From the Canadian perspective, I don’t think any firm can match the kind of depth we have now in three very important marketplaces: Ontario, Alberta, and Quebec.”
Macleod Dixon already had a strong international presence with a large office in Caracas and others in Brazil, Colombia, Russia, and Kazakhstan. Indeed, its South American outposts will mark Norton Rose’s first foray into the continent.
But Bill Tuer, Macleod Dixon’s managing partner, says the deal takes the firm to a level it could never have managed alone. “Although we were international already and we’re proud of our success, in reality we were a firm of approximately 300 lawyers,” he says.
“And in this competitive marketplace, you need a certain level of resources and a certain platform to really be able to service your clients, particularly at the international level.”
Norton Rose wasn’t the only domestic or international player interested in Macleod Dixon, according to Tuer, who says the British giant stood out from the crowd. “It is fair to say other firms have contacted us with expressions of interest.
We were very careful and very focused on what we were looking for.
It was a very logical next step for us to take what we had built and connect up with the global Norton Rose platform, which gives additional resources in Canada but also gives us access to that global platform, and not just any platform but a platform with a focus on particular industry sectors, including energy resources and financial institutions — those areas that were already a hallmark of our practice. So it was a very natural fit for us.”
Both Norton Rose and Macleod Dixon were among the first foreign law firms to establish a presence in the former Soviet Union “That’s one of those opportunities where we will bring our depth and resources and particularly our profile in mining and energy,” says Tuer.
“We have market-leading lawyers and a market-leading practice in mining and energy in Moscow. So we’re very complementary and our operations will fold neatly into the Norton Rose operations there.”
Jay Kellerman, a mining lawyer at Stikeman Elliott LLP in Toronto, says he’s not surprised to see Norton Rose making a play for Macleod Dixon because of its strength in energy and resources.
“I think the resource sector is extremely important to Canadian law firms,” he says. “In the past three or four years, those law firms who have historically not been as strong in the sector have realized the importance and are making strides to increase their exposure.
It’s a global business, and that’s why the Norton Roses of the world are getting involved now with Macleod Dixon.”
Although Canadian-listed mining companies may have their assets abroad, Kellerman says much of the legal work has to take place here. “It’s more than just mining per se. It’s corporate finance, M and A, and project financing.
They need to raise equity to develop projects, regardless of where their assets are. The Norton Roses of the world are looking to Canada as a market to feed their global franchise and keep the work internally when they have an Asian buyer acquiring a Canadian company with an asset in South Africa as opposed to it going to another Canadian law firm.”
Coleman says he had been in touch with Tuer over a possible merger for a long time but notes talks intensified over the summer.The focus for the next few months will be on the integration process.
“We’re following our clients, and our clients around the world are looking for us to change and go where they are going to help them when other clients or potential clients or companies are coming into the country,” Coleman says. “This is what the clients want.”
Coleman will stay on as managing partner of Norton Rose Canada, while Tuer will join the firm’s executive committee.
According to Peter Martyr, group chief executive of the Norton Rose Group, the firm’s global management is now eyeing a move into the U.S. market.
He told Reuters he hopes to find a partner firm there in the next two to five years and noted there are a “good bunch of firms” who might fit the bill.
“Ultimately, we have to be there, for sure,” he said. “It’s an imperative but it’s not time critical. There will be a time for us to do it with a firm or firms that suit or see the world the way we see it.”
For related content, see "Ogilvys hopes global deal will be magnet for other firms' partners."