Law Times

Page 4 February 10, 2014 • Law Times www.lawtimesnews.com Decision 'extremely important' for family lawyers that "several practice groups and even entire offices will continue to operate under new names." e firm of 500 lawyers spread across eight offices has lost at least 40 partners from a number of practice areas, including its core labour and employment group. Last weekend, the Ottawa lawyers in that practice area quit. ey in- cluded co-managing partner Dan Palayew, who's leaving for Borden Ladner Gervais LLP. ey follow others who have departed recently, including Tim Lawson, a member of the execu- tive committee who joined Mc- Carthy Tétrault LLP as a partner last week, and Michael Ledgett, who was national co-chairman of the infrastructure and public-pri- vate partnership group and is now at Dentons Canada LLP. DLA Piper is in talks to recruit a group of 55 to 70 lawyers from the firm's Toronto and Calgary offices. "ere is a sense of urgen- cy associated with this," said Roger Meltzer, co-chairman of Americas at DLA Piper, noting his firm was in "serious negotiations" with 25 to 30 partners in capital markets, mergers and acquisitions, tax, liti- gation, among other areas. "ey would become DLA Canada," said Meltzer of the firm's possible debut in the country. While the Heenan Blaikie col- lapse could feed the global firms' practices in corporate, banking, labour and employment, and other areas, the possible addi- tions would give them a limited boost because of Canada's lower billing rates, according to other legal experts. "Canada is a less at- tractive market to most U.S. firms because it is a lower rate market," said Peter Zeughauer, a U.S. law firm consultant. "For global firms, it may make sense to have an office there," Zeughauser added, noting some have set up lower-cost offic- es there to farm out work coming from other geographic locations. While a number of Vancouver partners formed Gall Legge Grant & Munroe last week, a source fa- miliar with the Heenan Blaikie situation said the Vancouver of- fice might become a firm on its own and Marcel Aubut, a partner who's also president of the Cana- dian Olympic Committee, may lead the Quebec City office. Said to be a rainmaker, Aubut joined the Montreal office many years ago and has had his own office in Quebec City. e smaller offices in Sher- brooke and Trois-Rivières, Que., may try and go it on their own. e future of the Montreal of- fice is a large unknown. e "question is whether there will be enough people le to make a firm," said one source. Many were watching the Heenan Blaikie story with disbe- lief as what was once considered one of the premium law firms in the country appeared to be fall- ing apart. "I think it's very sad," says Brian Grosman of Levitt & Grosman LLP. Grosman says when he saw last year that the leaders of the labour and employment group — namely Henry Dinsdale and Jeff Goodman — were going to Hicks Morley Hamilton Stewart Storie LLP, he felt it was "the be- ginning of the beginning." "When I first heard about that I thought: 'ere's something wrong here.' ese people are lead- ers in their group. Whenever the leaders are leaving, you know the troops are not all that far behind." One in-house counsel lawyer says the writing has been on the wall for large firms for more than a decade. "Like may firms, they are paying their lawyers too much and when they don't have the work to sustain it, it can all go pretty quick- ly. is is not a pretty story. Other firms know they aren't immune from it and they need to be very conservative at this point." A lawyer who le Heenan Blaikie about a month ago says the firm knew it was in a tough spot more than a year ago. Rev- enue pressures included client demands for steep discounts of up to 30 per cent. While the labour and employment and some parts of the litigation areas were doing fine, the corporate side had been suffering, according to the source, who requested anonymity. Even so, firm founder Roy Heenan told the Montreal Gazette last week the firm had a profitable year in 2013. When it comes to avoiding a crisis like the one at Heenan Blai- kie, there are a few things firms can do, according to Cameron. Ensur- ing adequate capital through strict payment of partner contributions should be a priority, he notes, adding being debt free and care- fully selecting clients are also good ways to minimize risk. "ere are lots of firms who take on securities clients without being paid upfront. e client they're dealing with doesn't have the money, but they'll take the client on in the hopes that when they get the [initial public offer- ing] done, when they get listed, they're going to get paid," he says. "So avoid those types of clients or insist on money upfront." LT — With files from Reuters Continued from page 1 s. 28 of the [Class Proceedings Act] in Tim- minco," she wrote. "I would hold that when a represen- tative plaintiff in a class action brought within the Securities Act s. 138.14 limita- tion period, also pleads a cause of action based on s. 138.3 of the Securities Act, to- gether with the facts that found that claim, and further pleads the intent to seek leave to commence an action under the Securi- ties Act, then that claim has been 'asserted' for the purpose of s. 28 of the [Class Pro- ceedings Act], and the limitation period is thereby suspended for all class members." e ruling "ensures that securities class proceedings remain in tune with their original purposes," says Joel Rochon, class action counsel and founding partner of Rochon Genova LLP. "In the case of CIBC, in particular, it will now be possible for everyday inves- tors to hold corporations accountable for misrepresentations and failures to dis- close," he adds. Family lawyer Bill Rogers, who repre- sented the respondent in the McConnell appeal, says he would have been happier if the appeal court had rejected the two-year limitation period for all constructive trust claims in family law but notes it's good the court has clarified when the clock starts ticking. e Superior Court's rul- ing suggested it was difficult to know when a claim is "discov- ered" in family law cases. "Does that knowledge rea- sonably or actually arise when the couple are no longer get- ting along? When one of them thinks of separating? When one of them tries to raise the issue of the title to a particular piece of property?" asked Jus- tice Craig Perkins. In response, the appeal court said that for the pur- pose of the law, the claim isn't discovered "until the parties have either divorced or there are reasonable grounds to believe that the relationship has been dissolved." Lerners LLP's Bryan Smith and Lind- sey Love-Forester, who represented the appellant, say the case is a significant one that will have an impact on several areas of law. "Firstly, the Court of Appeal was clear that although Huxtable v. McConnell is a family law case, the issue of whether the Real Property Limitations Act applies to a claim for a constructive trust will be the same whether the equitable claim for an interest in land arises out of a domestic relationship or a purely busi- ness transaction," the lawyers said in a joint statement. "Secondly, the Court of Ap- peal held that unless a specific statutory exemption applies, the Limitations Act 2002 ap- plies to claims for equitable relief, including a claim based on unjust enrichment. is would apply equally to equi- table claims in the commercial context as well as in estate law." Toronto family lawyer Phil- ip Epstein agrees the decision is an "extremely important" one for the family law bar. If parties decide to mediate a constructive trust case, they should remem- ber to toll the limitation period until the mediation is over, he says. "It's extremely important that lawyers do that. . . . ey could run out the limitation period while waiting for mediation." LT Continued from page 1 NEWS 14th Annual TLA AWARDS RECEPTION Tuesday, February 20, 2014 Reception – 6:00 p.m. & Presentation – 7:00 p.m. One King West, Grand Banking Hall, 1 King St. W., Toronto Recognizing THE HON. BOB RAE, recipient of the TLA Award of Distinction and MEGAN SHORTREED, recipient of the Honsberger Award Price $100 (HST incl.) per person or $950 (HST incl.) for a package of 10 tickets To purchase tickets please contact: 416-327-5700 or events@tlaonline.ca or Online at: http://www.tlaonline.ca/event/AwardsReception TLA_LT_Feb10_14.indd 1 14-02-04 9:20 AM DLA Piper in talks with up to 70 Heenan Blaikie lawyers The Court of Appeal ruling in Huxtable v. McConnell will affect many different practice areas, say Bryan Smith and Lindsey Love-Forester. Photo: Laura Pedersen

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