Companies & Industries

Why Canadian law firm Heenan Blaikie foundered and ultimately died

An ode to the law firm that housed Trudeau and Chretien

(Chris Helgren/Reuters)

(Chris Helgren/Reuters)

Founded in 1973, the law firm of Johnston, Heenan and Blaikie was born in a manner rarely seen among lawyers—through a handshake agreement. Instead of a contract, Donald Johnston, Roy Heenan and Peter Blaikie relied on trust to buttress their firm. That collegial atmosphere served the Montreal-based firm well, distinguishing it from its competitors and helping it attract a diverse roster of lawyers in a city divided on linguistic lines.

Johnston left in 1978 when he was elected to Parliament, leaving the firm as Heenan Blaikie LLP. He went on to be a cabinet minister and Liberal party president. Blaikie too tried his hand at politics, working as president of the Progressive Conservatives. He eventually stepped down as managing partner in 1993.

So it was left to Heenan, who was chairman for almost all of the firm’s history, to serve as its backbone. It was he who convinced Prime Minister Pierre Trudeau to join in 1984, a move that bolstered the firm’s reputation and forever associated it with the country’s political establishment. Other high-profile rainmakers would eventually follow, including Quebec Premier Pierre-Marc Johnson, Supreme Court Justice Michel Bastarache and Prime Minister Jean Chrétien.

In 1989 the Supreme Court upheld the right of Canadian lawyers to form partnerships across the provinces, ushering in an era of unprecedented expansion for law firms. That year, Heenan Blaikie opened an office in Toronto, and over the next 20 years the firm established itself in seven other Canadian cities, as well as Los Angeles and Paris.

Heenan Blaikie had 44 lawyers when Trudeau joined; 25 years later that number ballooned to more than 500. But when the recession struck in 2008, circumstances began to shift for law firms everywhere. Cash-strapped corporations looking to cut costs put pressure on firms to deliver results while cutting billable hours. Mergers and acquisitions, a lucrative source of revenue, dried up.

But it was in 2012, when Heenan stepped down as the firm’s chairman without choosing a replacement, that Heenan Blaikie truly faltered. In the subsequent leadership vacuum, in-fighting broke out between different offices and specialties. A handful of partners began to leave for better-paying jobs, taking their equity capital with them, which cut into the profits of the remaining partners.

The trickle became a flood, and in February it was announced that Heenan Blaikie would close, despite a $75-million profit last year. It’s survived by a number of small firms that arose from its ashes.