The View From Up North: How Did I Miss This International Merger?

Candid commentary from our Canadian columnist on a rather lame law firm merger.

I hate to admit this, but I totally missed the Gowlings merger announcement in July. The other day I was like, wait, what? Gowlings is merging? How’d I miss that? Bad Canadian columnist, bad.

In my defence, you might be able to infer the answer from the rest of this post.

In case you missed it too, Gowlings announced in July it was joining the ranks of international law firms by merging with UK-based Wragge Lawrence Graham & Co., effective January 2016. New name: Gowling WLG.

Some observations:

1. I’ve heard of many UK-based firms, but I’ve never heard of Wragge. It has absolutely no brand value to me. It obviously has little brand value to the mergerists (is that a word?) because the Wragge name is disappearing in favour of the Gowlings brand. In my mind that means Gowlings is the dominant player in the merger.

2. I’ve always thought of Gowlings as the Island for Misfit Lawyers. In case you don’t know its history, the current Gowlings is the result of an aggressive merger strategy more than a decade ago that saw the mothership fuse with an assortment of firms across the country, expanding its national reach and quickly growing into one of Canada’s largest law firms. Yet, even with its grand size and terrific IP practice, Gowlings has always been low tier two for me.

I found an interesting Lexpert article from 2001 that explained some of the rationale for this supercharged growth. Gowlings apparently wanted to challenge top-tier Corporate firms like Oslers and Blakes for high-value corporate clients.

Sponsored

According to the latest rankings of our favourite ranking agency, Chambers & Partners, thirty-three Gowlings lawyers merited inclusion in its Canadian rankings as strong practitioners. Of those, two lawyers were ranked as top performers (i.e., Band 1). Gowlings has approximately 700 lawyers, so Chambers gave a gold star to about five per cent of Gowlings lawyers.

Contrast that with the Seven Sister firm closest to Gowlings in size. McCarthys has about six hundred lawyers. Chambers gave a gold star to eighty-nine McCarthys lawyers, with twenty-two of them earning a top performer rating. Thus, about fifteen per cent of McCarthys fee earners got the prestigious nod from Chambers.

I think this highlights nicely that, whatever the supposed rationale for its merger strategy more than a decade ago, Gowlings did not explode into the legal stratosphere as hoped. Put differently, I doubt that McCarthys lawyers lie awake worrying about Gowlings abducting their clients.

So, what’s the rationale behind this merger, and will joining forces with Wragge help Gowlings accomplish what it couldn’t realize through domestic mergers?

Wragge represents the fourth sizable international debut in the last few years. Norton Rose, Dentons and DLA have all made their way to Canada. Baker & McKenzie has been in Toronto for many years.

Sponsored

Notice with N.R. (Ogilvy and Macleod Dixon), Dentons (Fraser Milner) and DLA (Davis LLP), all four Canadian firms gave up their names in favour of the international juggernaut. Ogilvy, in particular, had significant name recognition, yet it kissed all that goodwill bye-bye to join Norton Rose. Gowlings is keeping its name.

Thus, I ask, what value will a UK-based firm willing to give up its name bring to a tier-two Canadian firm? The managing partner of Gowlings, R. Scott Jolliffe, used phrases like these in a press release: “exciting and historic step”, “deeper pool of legal expertise” and “enable us to better serve our clients”, etc., etc.

Really? After many Canadian mergers and explosive growth, merging with a name-dropping UK firm is “historic”? Sorry, I just can’t see this making a blip on the Canadian legal landscape, IMHO.

More importantly, after three prior major arrivals, Gowlings/Wragge is… boring; so boring I almost didn’t write about it.

I want a big splash in the Canadian market, something fun and rousing. Come on Linklaters. Come on Clifford Chance. Come on Freshfields. Firms like you can produce real waves in Canada. Big, powerful, prestigious. I would gladly marry off one of our Seven Sisters to a well-heeled Magic Circle suitor. What a spectacular wedding that would be. An incredible castle, snow-tipped mountains in the backdrop, thousands of ultra-chic guests, champagne and fois gras. Captivating…

But, until a Magic Circle firm comes to Canada with a-courtin’ on its mind, how about we cut out these international mergers for now? Gowlings and Wragge? That’s a city hall wedding, followed by dinner at a local restaurant with no dancing or drinking (think Footloose before Ren dropped into town). I don’t know about you, but I’m home in bed by nine.

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 Steven Dykstra Law Professional Corporation, a boutique corporate/commercial law firm located in the greater Toronto area. You can contact Steve at steve@stevendykstralaw.ca. You can also read his blog at stevendykstra.wordpress.com, follow him on Twitter (@Law_Think), or connect on LinkedIn (ca.linkedin.com/in/stevedykstra/).