Leonard speaks about his firm's growth, the recruitment environment and advice to young lawyers
Canadian Lawyer recently spoke to McCarthy Tétrault LLP Chief Executive Officer Dave Leonard about his firm’s growth, new practice groups, challenges, recruitment, and advice to young lawyers.
What have been the significant developments at McCarthy Tétrault in the last 12 months?
We have been enjoying tremendous growth, particularly with our transactional practice. Our firm has focused on growing and building that transactional practice. High inflation, rising interest rates, and the Ukraine conflict inject some uncertainty into things though.
We have grown our tax practice, bringing in several partners across Canada. We’ve gone from having a good, solid, stable tax practice to having one of the leading, if not the leading, tax practices in the country.
Several of our lawyers are also quite plugged into various levels of government. For example, our lawyers worked closely with the Toronto Region Board of Trade and business leaders to develop a regulatory framework for vaccine passports. I think that ultimately put pressure on the Ford government, which was at least one of the reasons why he eventually ended up doing it.
Our lawyers were also very involved behind the scenes in several major sports leagues to bring teams across the border from the US to play in Toronto as one of the hubs.
Those examples were not permanent changes to our firm, but they showed the creativity of our teams. We also added ESG and cyber and data practices to our firm.
ESG is a hot area – tell me about that practice group
The primary purpose will be to advise our clients on ESG issues and compliance. Increasingly, ESG issues impact M&A transactions, the regulatory environment, and shareholder activism.
We’ve been talking about ESG for a long time, but the corporate world has really focussed on this in the last 12 to 18 months. For example, we have been doing a GC summit since 2019, and the focus for last year’s summit was ESG. For a period, many people questioned whether ESG would be a fad or a sustainable area of interest. We are now seeing that this will be a significant area of focus with our clients.
We are also working on our internal ESG policy and then pulling on the strengths of our people to help us do that.
What are the areas of challenge for your firm?
Our restructuring practice has not been as robust as our other practice groups, but I’m not overly concerned about that. We will be poised when the market turns as it almost inevitably will. It’s been steady, but they haven’t seen the uptick that you might have thought you would see with the pandemic. I believe that is because of governments’ support out there in the financial markets.
Our litigation practice continues to be solid, but we’re not seeing the double-digit growth over the last 12 months in that practice that we see in some of our transactional practice areas.
The great unknown is how long will the growth last for the transactional practice? And when it slows down, how deep, and how long will that slowdown be?
Are you expecting a slowdown?
Do I wish that double-digit growth was sustainable permanently? For sure, but history would tell us it’s not. You can’t underestimate the impact the conflict in Ukraine is creating as well.
I’m not an economist, but I think a slowdown is coming. Is it this year? Is it next year? Is it three years from now? I don’t know how long or how deep, but I would say I had a better window a year ago into what the pipeline of work would look like, but now I have less.
Tell me about your transition to the office
We have always said that there will be a time for us all to come back. Last fall, our team started to return to the office regularly but then when Omicron hit, we were asked to send our people home again, and of course, we did.
We took those learnings, and we reset the program for the spring. We’re asking the lawyers to come in the majority of their time in the office. Our legal assistants and other staff have a set number of days per month in the office.
We have an all-lawyer meeting at the end of October, where we’re bringing 750 of our people together in Austin, Texas. We see that as an important milestone to take stock to reconnect.
It’s been challenging the recruitment environment, with US firms offering huge hiring bonuses, for example.
The last 24 months have been a challenge for recruiting. Many of our competitors have also been busy, so the demand for lawyers and associates is high.
No doubt we’ve also lost a few associates to the US. Some of the offers that the US firms are making are not something that we can compete with, but the number of associates who we’ve lost to US firms in the last two years is not a huge piece of the attrition.
What I think is more common is people taking stock. I believe the pandemic has caused a lot of people to decide to go off to do other things. So, we’ve talked a lot about what we’re building here at the firm and the opportunities to work with our clients. We are also talking a lot about what we’re calling wellness and how we take care of our people.
We want you to have some downtime, take a break, take your vacation, and we are offering some additional money and opportunities to go and do that. We’ve been talking to our partners about giving associates a break in a couple of ways.
Have you offered lawyers flexible work arrangements?
We always had flexible work policies, but we recently doubled down on communicating those and encouraging people to take advantage.
What about pro bono and diversity and inclusion initiatives?
We continue to invest heavily in our pro bono program. We have focused a lot of our investments on Indigenous and Black communities.
We were the first Canadian law firm with a full-time chief inclusion officer. It is something that has set us apart. Our competitors are now catching up, and that’s great.
What is your advice for young lawyers entering the profession?
I would stress the importance of showing up and being in the office and meeting face-to-face with clients, partners, and colleagues. Teamwork and collaboration are part of the culture that we have built and continue to develop at the firm.
Young lawyers need to be resilient, creative, and flexible.
Some of our very best lawyers can pivot and reinvent themselves and follow the market trends. Not week to week or month to month, but the year-to-year cycles.
*Answers have been edited for length and clarity.
Dave Leonard is a judge at this year’s Lexpert Rising Stars Awards, which honour leading lawyers under 40 from law firms, in-house departments, and other practices. Nominations are open, and close on July 8.
