Biglaw, Canada, Law Firm Mergers

The View From Up North: The DLA Piper/Davis Merger

Was Davis in financial trouble prior to the announcement of its merger with DLA Piper?

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DLA Piper finally found a Canadian disco partner in Davis LLP. It’s no secret DLA has been doing the hustle around the Great White North for several years now, trying to find a suitor so it could get its greencard. It nearly consummated a marriage last year with Heenan Blaikie just prior to HB’s epic plunge, but for whatever reason, those firms were unable to make it to the altar.

The DLA/Davis merger will take effect in April and the new Canadian entity will be called DLA Piper (Canada) LLP. It’s really a whale swallowing krill, in many respects.

Let’s do a tale of the tape.

DLA Piper

Number of Lawyers: Approximately 4,000
Offices: Too many to list, but some of the main ones are: New York, Chicago, D.C., Sydney, Paris, London
Revenue (2013): $2,481,000,000 (highest among all law firms globally)
Profits Per Partner (2013): $1,325,000

Davis LLP

Number of Lawyers: Approximately 260
Offices: Vancouver, Calgary, Edmonton, Toronto, Montreal, Tokyo, Yellowknife, Whitehorse
Revenue: Not publicly disclosed
Profits Per Partner: Not publicly disclosed, but virtually guaranteed not nearly as high as DLA’s

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Let’s see, four thousand divided by two-sixty — DLA is fifteen times bigger than Davis. Adding our Canadian firm to the DLA cocktail only increases lawyer headcount by about 6.5%.

When a huge firm devours a smaller firm, I am always interested in how much power the smaller firm retains. I spoke with Rob Seidel, managing partner of Davis, and he said the Canadian partners will have full autonomy over the Canadian market. DLA uses that most mysterious creature — a Swiss verein — to govern its global activities. DLA Piper (Canada) LLP will be a separate partnership. It will join DLA Piper Global, the verein. In addition, the Canadian partners will get representation at the global board level.

The other interesting question, of course, was Davis in financial trouble? In other words, was it forced to find a dance partner in order to keep afloat, à la Heenan Blaikie and Goodman and Carr, both of which collapsed shortly after merger talks went south with other firms. To be clear, I haven’t heard any scuttlebutt Davis was leaking oil. But, while you got ‘em on the phone, you gotta ask…

Rob Seidel immediately dismissed the idea that Davis was taking on water. He said when DLA and Davis started talking, it quickly became apparent the two firms had similar cultures. The merger was ultimately about strategic growth for two firms that shared similar values.

What does DLA get out of this? Entry into Canada — finally. DLA is nothing, if not persistent. By reputation, I think it’s fair to say Davis would be considered one of the strongest firms in Vancouver and a good firm in Alberta. With respect to Toronto, well, how many of you even knew Davis had a Toronto office? Roger Meltzer, DLA’s Global Co-chair, adverted to the fact the new DLA Piper (Canada) LLP will need to up its game in Toronto. My overall assessment: DLA has merged with a very respectable, second-tier firm and gained entry into every major city in Canada.

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What does Davis get? As Rob Seidel noted, it gets access to partners in virtually every important legal market on the planet. In a globalizing world, where “globalization” is a globally important ambition, Davis now has reach onto every continent, but Antarctica (and, surely, DLA is planning an expedition there too). Davis also gets DLA’s brand to stamp on its glossy marketing materials.

Baker & McKenzie has been in Toronto for a long time. Norton Rose arrived a few years ago, followed by Dentons. Thus, my biggest question is, will DLA be viewed as just another international mega-firm? Will potential clients say, “If I wanted to go to an international firm, I would have already called Norton Rose, so why would I go to you, DLA?” Or, can it distinguish itself in a meaningful way from the terrific made-in-Canada firms and the international firms that already dominate the landscape?

A few months ago I wrote a column on why it’s difficult for international firms to set up shop in our fair nation. At the end of it, I urged whoever showed up next to do so in a big and bold manner. No greenfielding; no gobbling up boutiques. DLA has answered the bell. It opened wide and swallowed a pretty big piece of krill by Canadian standards. Thus, I salute you DLA. I admire your persistence and willingness to go Biglaw or go home. For today, be enthused and proud of your accomplishment.

We’ll revisit whether it makes any difference to the Canadian legal landscape in a couple of years.

That’s the View From Up North: Have a great week.

Steve Dykstra is a Canadian-trained lawyer and legal recruiter. He is the President of Keybridge Legal Recruiting, a boutique recruitment firm that places lawyers in law firms and in-house roles throughout North America. You can contact Steve at steve@keybridgerecruiting.com. You can also read his blog at stevendykstra.wordpress.com, follow him on Twitter (@IMRecruitR), or connect on LinkedIn (ca.linkedin.com/in/stevedykstra/).

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