Friday, June 02, 2017
It used to be that beyond name recognition — logos and the like — branding served only a limited purpose for law firms who sold services based for the most part on the individual expertise of their lawyers or their practice groups.
But as personal contact declined in a globalized, connected and online world, the elements that create and maintain relationships, personal or otherwise, have changed. As face time decreases and alternate modes of projection and communication emerge, of necessity a void is created. Branding is what fills that gap. It does so by establishing a framework within which today’s varied and frequently remote business connections — relationships if you will — can emerge and fortify.
That’s why watching the Acritas Canada Law Firm Brand Index over the six-year life of the index is so enlightening about the domestic legal market. Over the past five years, the index has reflected the views of some 400 senior in-house counsel from Canadian organizations and from multinationals with legal needs in Canada. It measures the brand strength of law firms across six metrics: top-of-mind awareness; favourability; consideration for top-level deals; and for litigation; overall usage among Canadian organizations; and usage among multinational firms with Canadian interests.
To some degree, the trends revealed by the index defy the prognosticators. As the likes of global giants like Norton Rose Fulbright, Dentons and DLA Piper have absorbed significant domestic players, the future of firms who failed to join the global parade and remained rooted in Canada was at the outset considered by many observers to be limited, if not dim.
In 2013, the Index named Norton Rose (now Norton Rose Fulbright) as the Canadian brand most favoured by influential companies from Canada and around the world, displacing Blake, Cassels & Graydon, the premier brand in 2012, the first year of the index. The index’s authors noted that Norton Rose’s placement translated into “improved brand consideration for premium work and overall usage.” The doomsayers seemed to have got it right. Norton Rose, a global firm, had became Canada’s top brand within two years of having absorbed Canadian icons Ogilvy Renault LLP and Macleod Dixon LLP.
The fact that standalone Canadian firms made up the rest of the top 15 in 2013, on the other hand, foretold nothing at all: after all, there were no other global firms on the domestic landscape then. What is telling, however, is that by the time the 2017 index was released, Norton Rose had slipped into a fourth-place tie, down from third in 2016, first in 2015, and second in 2014.
The other global firm around long enough in Canada to make an impression is Dentons. It merged with Fraser Milner Casgrain LLP in 2013. By 2015, it was in 10th place on the Acritas Index, holding the position in 2016 and moving up to ninth this year. Let’s put that in perspective: in 2012, before Norton Rose’s arrival really had a chance to take effect, Blakes was number one. In 2013, Norton Rose displaced the homegrown firm, gave it back to Blakes again in 2014, and itself returned to the top spot in 2015.
For the last two years, however, Blakes has taken the honours, doing so in 2017 by the widest margin ever. As well, the only time Blakes finished worse than second was in 2013, when it placed third, yielding second place to McCarthy Tétrault LLP. Meanwhile, Norton Rose fell to third in 2016 and by 2017, it was still falling, in a fourth place tie with Fasken Martineau and behind Stikeman Elliott LLP in third spot and McCarthyTétrault in second.
The stunning success of the Norton Rose brand, then, between 2013 and 2015 is clearly attributable to the brouhaha surrounding Canada’s first major international merger. Now that the novelty’s worn off, the brand is slipping.
Similarly, Dentons has benefited from the hype. Because the benefit was not as extreme as the Norton Rose phenomenon, which was not only the first global merger in Canada but involved the serial absorption of two high-profile legacy firms, Dentons never got quite as much out of it. Its steady placing over the three years since the merger with Fraser Milner is a sign that, unlike Norton Rose, its initial success was more sustainable. Put another way, there’s a lot more bottom to drop out when you’re in first place than when you’re in 10th.
This having been said, there’s also no question in my mind that the international mergers have been, for the most part, successes. The Norton Rose brand now stands and will remain, in my mind, in the top five, somewhere around where a combination of Ogilvy Renault and Macleod Dixon, two solid firms, would have ended up had they simply merged with each other. Similarly, Dentons is likely in the same arena as Fraser Milner would have been before its merger. The difference here is that Ogilvy Renault and Macleod Dixon were, while Fraser may well have been in decline, in a slide that appears to have been arrested by its combination with Dentons. Otherwise, it’s probably too early to see the impact of DLA Piper’s merger with Davis LLP.
What all this tells me is that major Canadian firms will in the foreseeable future not necessarily have to succumb to the lures of international merger in order to survive and flourish. Rather, the key to their success will be making the right choice.
Blakes stood firm: that was clearly the right choice for it, as it has likely been for McCarthy and Stikeman. Osler Hoskin Harcourt LLP, ranked sixth, Borden Ladner Gervais LLP (seventh) and Torys LLP (eighth) also do not appear to have suffered from refusing to climb on the international behemoth bandwagon.
For its part, Fasken has turned the international merger on its head, with Canada as its base even as it expanded to London and Johannesburg. Gowling WLG, ranked 10th in 2017, has done so as well, combining with U.K. firm Wragge Lawrence Graham & Co. Would any of these firms be doing better if it had chosen another path? My guess is not: it looks like they matched the ticket to the train — at least for the time being. Wishful thinking beyond that is probably unwise.