Adam Dodek talks to Canadian Lawyer about his new book, the story of the firm's rise and downfall
Over the course of six weeks in late 2013 and early 2014, nearly 500 lawyers and a thousand legal staff in Montreal, Toronto, Vancouver, Calgary, Ottawa, Quebec City, Sherbrooke, and Trois-Rivières lost their jobs. More than 200 of those lawyers – partners at Heenan Blaikie, then one of Canada’s largest law firms – not only saw their equity vanish, but also found themselves suddenly owing hundreds of thousands of dollars in debt.
The historic collapse of Heenan Blaikie was the first – and to date, only – time a national law firm had failed in Canada. But according to Adam Dodek, a professor at the University of Ottawa’s Faculty of Law, the firm’s downfall was not the result of debt, insolvency, or other financial pressures. Heenan Blaikie failed, Dodek wrote, when the firm “simply lost its collective will to exist.”
Dodek chronicles the remarkable story of the firm – from its founding by three McGill Law graduates in 1973 through its ascension in Canada’s legal landscape to its dramatic shuttering in 2014 – in his new book Heenan Blaikie: The Making and Unmaking of a Great Canadian Law Firm, out Tuesday.
In September, Dodek talked to Canadian Lawyer about his book, the ongoing impact of Heenan Blaikie’s downfall, and what other firms can learn from the historic collapse.
The following has been edited and condensed for clarity.
Why did you decide to cover the history of Heenan Blaikie?
When the firm collapsed in February 2014, I was writing reports on the legal developments in Canada for an English journal called Legal Ethics.
The biggest story in the legal profession was the collapse of Heenan Blaikie. It was unprecedented. There had never been a national law firm that had collapsed. I knew from my work and my experience that there had been lots of law firms in the US that had collapsed, and some quite spectacularly.
I also knew that there were local law firms in every city, some fairly sizable ones, [including] a firm called Goodman and Carr LLP in Toronto. And there are other firms in local markets, but in each of those that involved maybe 70 or 100 lawyers. This was a collapse that involved over 500 lawyers, over 1000 staff in Vancouver, Calgary, Toronto, Montreal, Quebec City, other offices in Paris. So, it was big. It was a huge, huge scale.
I had worked at a law firm in San Francisco, and I had worked at a law firm in Toronto, and in Canada, there was very little writing about what actually goes on in a law firm. The only writing tended to be by partners writing a… commissioned or a celebratory history, where the law firm would commission somebody to write a history. So, I felt there was a unique opportunity to tell a story about what really goes on in a law firm, and a law firm that I felt was of some consequence or interest.
You talked to many lawyers and legal staff who worked at the firm. Was it easy getting people to talk to you?
I interviewed over 180 lawyers who worked at Heenan Blaikie and then another 40-plus lawyers and legal industry insiders, people who worked in the legal profession or had some connection.
There were certainly people whom I approached who wanted nothing to do with the project, but most of the people that I approached were willing to speak with me, largely on the condition of anonymity, and to be referred to as a lawyer in the Toronto office or the Vancouver office, etc.
The book emphasizes Heenan Blaikie’s culture, and how it strove to be distinct from that of other corporate law firms. Why did you decide to focus on this?
I heard over and over again about how they wanted to be a different sort of law firm, how they saw themselves as a kinder, gentler law firm, and how the founders were trying consciously to be different from the law firms that they had come from in Montreal.
They exported that culture – I think successfully – to Toronto and to Vancouver, less successfully elsewhere.
I felt that part of the collapse was related to the loss of that culture or the inability to sustain it. To me, that was an issue not just for Heenan Blaikie but for any growing organization.
A question that I raised in the book that I don't have an answer to is: When you're growing and when you're expanding as an office, as an organization, how do you maintain a distinct culture that was present that allowed you to succeed and create a distinct identity?
You also focused on the firm's lack of a modern governance structure and how this was a significant factor in its demise.
That was not something that I thought was going to be as big a theme as it was. I didn't know that much about the firm or its collapse when I started the project, but over and over again, people said to me, “Oh, it was like a family.” It became apparent to me that they weren't just saying that that's how people felt, but also that it was very much run like a family business.
That was fine when the firm was smaller, but when you had 250 lawyers, certainly by the time they had 500 lawyers, they hadn't really adapted to more modern management and didn't have policies and procedures. When they got into trouble, in the sense of having economic challenges in 2011, 2012, and 2013, they didn't have those structures to fall back on.
When I started looking back and seeing how the firm was organized and managed, that lack of structure, it became apparent to me that it was a real weakness in the firm and a very, very strong contributor to its demise.
I would add that it's a weakness or a challenge for law firms in general. Lawyers are really, really protective of their turf, and I think lawyers can also be arrogant in thinking nobody else can do law, but lawyers can do all these other things, like marketing, like government relations, like managing a law firm, without any specialized training. They’re hesitant to bring in outsiders.
You see a lot more large law firms bringing in professional managers who are not lawyers to run their firms, and Heenan Blaikie came to that conclusion that's what they needed. But the problem was that by the time they made that decision, it was too late.
Do you think other law firms have learned from Heenan Blaikie’s downfall?
There's no question that other firms learned from what happened to Heenan Blaikie.
I described in the book how the partners were largely disinterested in how their firm was run. They largely had their heads in the sand. They trusted in management, and they didn't ask tough questions. I think partners at other firms acted similarly. When Heenan Blaikie collapsed, partners at other firms told me they started asking tough questions.
I don't think it caused, but I think it contributed to, a relatively new development of people being less inclined to want to be partners at a law firm. Being a partner at a law firm used to be the pinnacle of one's legal career in private practice. And what you see now is a lot of people choosing not to be partners and having other titles, like counsel, senior counsel, etc.
I know that [firm founder] Peter Blaikie himself gave an interview a few years after the collapse where he said partnership isn't all that it's cracked up to be.
Do you think what happened at the firm was an anomaly?
There are other firms that probably share some of weaknesses of Heenan Blaikie. There’s an article in The Globe and Mail by Robyn Doolittle about a Toronto firm that collapsed called Minden Gross.
It talks about some of the problems that they had in their billing practices, and it reminded me very much of Heenan Blaikie.
One of the lessons of Heenan Blaikie is that if it could happen to a firm like that, then there's no reason why it couldn't happen elsewhere or again.
