Law Times

November 22, 2010

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TF: 1.888.781.9083 www.docudavit.com $4.00 • Vol. 21, No. 37 ocdavit_LT_June7_10.indd 1 6/4/10 9:22:44 AM Inside This Issue 5 Libel Ruling Appealed Covering Ontario's Legal Scene Untitled-3 1 www.twitter.com/lawtimes November 22, 2010 5/5/10 3:55:30 PM Ogilvys hopes global deal will be magnet for other firms' partners BY JULIUS MELNITZER For Law Times 6 T Double-dipping 9 Focus On Environmental Law Quote of the week "It's not unusual to have division among First Nations, whether you're dealing with the Mackenzie Valley pipeline, building a wind farm or constructing a hydro plant." — Adam Chamberlain, Borden Ladner Gervais LLP See Boreal, page 10 here are four key things we know about Ogilvy Renault LLP's stun- ning announcement last week that it will be the fi rst Canadian law fi rm to go global by joining the international legal practice known as the Norton Rose Group on June 1. First, the Norton Rose Group is struc- tured on the Swiss Verein model, which means there's no fi nancial integration be- tween its components. Second, Norton Rose has no members in the United States, which continues Ogil- vys' long-standing reluctance to commit to any physical presence south of the border while instead favouring an international reach over a continental one. Th irdly, Ogilvys has made it clear it re- gards its new alliance as a magnet for luring high-profi le lateral moves from the rest of the domestic market. Finally, at least one other Canadian fi rm approached by the international legal prac- tice has no interest in a global arrangement at this time or, it seems, no desire to enter into a deal with Norton Rose. As for the Verein model, it's essentially a structure used by international accounting fi rms Deloitte and KPMG and international law fi rm Baker & McKenzie LLP. Local part- ners are subject only to regulation in their own jurisdiction, and liability doesn't cross borders, which protects the fi nancial integrity 'Canadian law firms may not disappear but they will follow our lead in some way,' says Norman Steinberg. of the international networks. Th e structure appears to have worked well for the accounting fi rms, but there's far less unanimity about how well it has suited Baker & McKenzie or jived with its goals. Still, Stephen Parish, the Norton Rose Group's chairman, lauds the Verein struc- ture. "Th e real beauty of the Verein is that we can deal with each member of the group individually and at the same time allow quality, unity, and integrity to bind us all," he said. "Th is is as close a relationship as you can get without fi nancial integration." Of course, that's not to say that fi nancial integration is out of the question. "Th ere are huge issues, including currency and tax, that need to be addressed fi rst," Parish said. "But forget about fi nancial integration be- cause this is still a marriage in the real sense of the word." Both Ogilvys and Norton Rose play down the notion that the merger represents the fi rst step in the hollowing out of Canada's legal market. "Th is is not a franchise opera- tion or a one-way ticket," Parish said. "As we discovered during our Australian merger, we have a lot to learn from the diff erent ways in which law fi rms around the globe operate." Still, some people are wondering about the implications. A hindsight look at the development of the Canadian legal market reveals a certain tendency on the part of ex- perts to predict that fi rms here won't follow U.S. and British trends for various reasons. A frequently mentioned factor is that Can- ada and its legal market are too small, for example. Market patterns here invariably follow the giants' lead, however. It's just that we take longer to get there. Nevertheless, the United States is a defi nite target for Norton Rose. "We're not quite See Firm, page 4 Lawyers alarmed by new tax rules T BY MICHAEL McKIERNAN Law Times ax lawyers fear new re- porting obligations for aggressive tax avoidance transactions may compromise solicitor-client privilege. Back in March, the federal government announced it was looking at amendments to the Income Tax Act to weed out ag- gressive tax plans it said were un- dermining the fairness of the tax system. Th en in August, the Depart- ment of Finance put some fl esh on the bones of its proposals with draft legislation that would im- pose reporting obligations for "ag- gressive transactions" on taxpay- ers and their advisers, including stiff penalties for both parties for any omissions. Suzana Popovic-Montag, man- aging partner at trusts and estates fi rm Hull & Hull LLP, can't see any way to report transactions without revealing information passed in confi dence between cli- ents and lawyers. "It seems quite clear that we're being asked to breach the solici- tor-client privilege," she says. With the vagueness of the def- TitlePlus_LT_Mar9_09 2/27/09 11:23 AM Page 1 initions in the act, lawyers could fi nd themselves at odds with their clients when they disagree over whether a transaction is report- able. "We encourage clients to tell us everything in confi dence and tell us everything they can so we can assist in the best way we can," says Popovic-Montag. "Th ey have an expectation that we're not going to repeat that, let alone use it against them." It's not just tax lawyers who should be worried about the legis- lation, according to Popovic-Mon- tag, because any move that erodes solicitor-client privilege will have a spillover eff ect on public confi - dence in the legal profession. "I'm ultimately afraid they're opening up a Pandora's box of issues that compromise everything we've held so important and untouch- able for so many years," she says. "If people start suddenly thinking, 'My lawyer might use things I tell them against me,' they won't tell us anything any- more or they'll tell us less. It compromises the fundamental tenets of our relationship." Together we have all the tools To ensure your clients get the most comprehensive coverage in one title insurance policy, take a look at the TitlePLUS Program , your Bar-related real estate partner! 1 ® PROTECTION AS GOOD AS IT GETS 1-800-410-1013 ® TitlePLUS, the TitlePLUS logo, OwnerEXPRESS and LAWPRO are registered trademarks of Lawyers' Professional Indemnity Company. ® BAR-RELATED Mark is a registered Mark of North American Bar Related Title Insurers used by LAWPRO under License. titleplus.ca 1 Please refer to the policy for full details, including actual terms and conditions. The TitlePLUS policy is underwritten by Lawyers' Professional Indemnity Company (LAWPRO®). Contact LAWPRO for brokers in Saskatchewan, Manitoba, Alberta and Québec. TitlePLUS policies issued with respect to properties in Québec and OwnerEXPRESS® policies do not include legal services coverage. ® Th e Canadian Bar Association has also stepped into the fray to make its concerns known in a letter to the federal minister of fi - nance. Although the association's tax section composed its submis- sion on the legislation, it was CBA president Rod Snow who addressed the minister, noting the issue was "of importance to the legal profession as a whole." "We have singled out the in- formation reporting measures because, if adopted in their cur- rent form, they will create a seri- ous incursion into solicitor-client privilege and will compromise the independence of the legal profes- sion," he wrote. "Th ese are funda- mental and foundational elements of the Canadian justice system See Counsel, page 4 LT Digital version.indd 1 6/25/10 12:59:47 PM Click here to subscribe today to LAW TIMES Follow on www.lawtimesnews.com

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