In the wake of last week’s announcement that Goodman and Carr LLP will be closing up shop, lawyers on Bay Street - and beyond - are buzzing about the reason for the firm’s demise and wondering where its 85 lawyers will land.
Although, at press time, the firm hadn’t made a formal, public announcement about its dissolution, word surrounding the 42-year-old firm’s demise spread like wildfire through the legal community.
The firm’s partners voted last Tuesday night to dissolve the firm. Lawyers and staff, and the rest of the country it seems, found out the news on Wednesday.
Did it have anything to do with last month’s failed merger discussions with Chicago-based Baker & McKenzie LLP? Did the exodus of more than 30 lawyers, many of them senior partners, in the last year alone sound its death knell?
Chairman of the firm and former managing partner Gary Luftspring says, “The key to law firms is talent. Clients come and go, but if you can’t attract the talent, you’re done.”
Luftspring also says that “after a while, it’s just not fair when some partners keep coming back to you and ask you to keep carrying them.”
One Bay Street wag says that partnership at Goodman and Carr was a bit of a smoke-and-mirrors act. Some of the partners with the huge clients had special arrangements with the firm and therefore there weren’t as many capital partners as it may have seemed, says the source.
Regardless, our source says those wondering why Luftspring hasn’t been around since the announcement should know he’s out actively seeking new homes for the practice groups and lawyers at the firm. It may also get ugly in the upcoming weeks as other firms start “circling to see what they can get.”
Steve Watson, a partner and appointed spokesman for Goodman and Carr, says, “The decision of the partners was to conduct an orderly wind-down over a period of a number of weeks. The firm will cease carrying on the practice of law as of June 6.
“We’ve been dealing proactively with lawyers talking to clients. There have been a number of stories in the press but a formal press release wouldn’t reach our client base.
“The firm will continue to exist as an entity beyond that but the expectation is the lawyers will find homes beyond that or new places to practise from before that and that they will continue servicing the firms clients from their new locations.”
The firm, known for its tax and real estate practices, recently switched tack late last year after the departure of several tax lawyers and senior partners. It announced last year that Paul Bleiwas would be the new managing partner, bringing a youthful approach to the firm and its clients. Shortly after that, one of the founding partners, Wolfe Goodman, passed away.
“Thank God he didn’t live to see this day,” Luftspring says. “It’s very sad.”
Watson told the media the failed merger wasn’t to blame but rather it’s the competitive marketplace and recent staff departures that led to the firm’s decision to close.
Watson stated that the closing was not triggered by financial concerns.
However, a source, who wishes to remain anonymous, says the firm could have continued for at least five more years, maybe even 10, but the partners decided to pull the chute early to avoid liability.
The lawyer says the firm survived as long as it did thanks to very strong income trust, estate, and real estate practices.
Lisa Borsook, the new managing partner of WeirFoulds LLP in Toronto, says while the dissolution of Goodman and Carr is distressing for everyone - as the firm had a good reputation and a number of good lawyers - it shouldn’t be attributed to the stresses of being a mid-size firm.
“It’s not mid-size firm pressures that are the reason Goodman and Carr [is] closing its doors,” she says, adding that there are likely other things that those outside the firm don’t have knowledge of that led to its dissolution.
“The thing is, what happened at Goodman and Carr is not a reflection of what is happening at mid-sized firms but a reflection of what happened there,” she says.
On the other hand, Eugene Meehan, the chairman of Lang Michener LLP’s Supreme Court group in Ottawa, says while he doesn’t know the reasons why the partners at Goodman and Carr made this decision, the pressures of being a mid-sized firm shouldn’t be discounted.
“There are challenges to being a mid-sized firm,” he says. “You basically have four choices: develop strong client relations with your areas of expertise; become a boutique; ramp up and muscle up by taking on valuable lateral hires; or you merge up.”
The announcement also has incoming articling and summer students fretting over what they are going to do.
Watson says they were taken into account in the firm’s closure plans. The Law Society of Upper Canada requires law firms that rescind on their commitment to provide articles to assist students in finding an appropriate alternative.
“We’ve already made communications with a number of the firms within the community and have received back overwhelming responses offering assistance to those incoming students.”
Goodman and Carr’s closing is believed to be the largest in Canada. The last time a Toronto firm closed down was just over 10 years ago when Toronto-based Holden Day Wilson LLP shut down in the wake of Garry Hoy’s fatal accident.
With files from Julius Melnitzer, Helen Burnett, and Jim Middlemiss.