LAST WORD: The Big Think (original title: Ignorance is bliss)
Lexpert, May 2006
Three beer jugs and an assortment of soju bottles down, in a smoky expat bar in South Korea, an American friend of mine described the difference between Americans and Canadians thus: “Canadians think about what Americans think about them. Americans think about… baseball.” As regards the legal profession on both sides of the 49th, I’d paraphrase him so: “Canadian law firms worry about US law firms taking away their work. US law firms worry about baseball.”
Okay, actually, they worry about other US law firms. They also worry about UK law firms and transatlantic mergers a little. Canadian law firms? Not so much. And continental mergers? What’s that, mergers with firms in Mexico City?
This attitude upsets some Canadians—in fact, it gives us a bit of an inferiority complex (and if there’s one thing we’re really good at… well, that would be taxes, but if there’s a second thing we’re really good at it, it’s inferiority complexes). But it shouldn’t. Indeed, the less US law firms worry about Canadian law firms, the better. Tweaked a bit, it can be a competitive advantage. As a wise Greek old dude reportedly said, “There is only one good, knowledge, and one evil, ignorance.”
Get it? The more ignorant US law firms are about Canadian law firms and the Canadian marketplace, the better for the Canucks—so long as Canadian law firms don’t reciprocate with ignorance in turn. Know thy enemy—er, competitor—and all that, don’t you know. The less they know about us, and the more we know about them, the more likely we are to survive the coming global shake down.
(When I say “we,” I actually mean two or three—maybe five, but don’t hold your breath—of you. Which ones? Ah, that is the question. Right now, one can still say there are seven to 11 in the running—some folks say 12, but barring a miracle #12 is out of the running now—with three clearly in the lead. You know who you aren’t. But the game is definitely not over yet. Indeed, some would say it hasn’t even begun.)
That a shake down is coming is no secret: Canadian law firms have been expecting it since before there were Canadian national law firms. The more forward-looking of them felt it coming before the FTA and NAFTA (heck, before information technology became a practice area); today, even regional boutiques ponder exactly how they fit into an integrating North American economy, typified by a “relentless grind” of global consolidation. When a nominally Canadian company’s headquarters are in London, assets in Kazakhstan, and its money sourced through New York, exactly how do its Canadian legal services providers stay relevant?
That’s the question that’s been keeping Canadian lawyers—more specifically, Bay Street lawyers—awake at night for the past decade. It’s the search for its answer that has them renting office space in New York and Chicago, inundating US law firms with “Canada updates,” frequenting US conferences, sponsoring events frequented by alleged US decision-makers and otherwise trying to make our bigger American cousins notice us—and differentiate between us.
Because if the Americans do not spend a great deal of time thinking about Canadian law firms, they do spend quite a bit of time thinking about Canadian deal flow. Granted, compared to all of the US market, Canada is a tiny pond. But bundle the Canadian market up and compare it to, say, each of New York or California… and Canada looks pretty desirable, especially when its bigger companies get that way by getting footholds in the US market.
The reason US law firms don’t have to think a lot about Canadian law firms—and certainly do not regard Canadian law firms as either significant competitors or potential merger partners—is simple. US law firms know they’re going to have key mandates on both outbound and inbound cross-border deals. The US market, and the importance of complying with the various regulatory regimes in the US, is so critical, their role is a given, no matter how, um, “patriotic” a Canadian client may be. And, at the risk of painting the varied market down south with one brush, US law firms tend to think that if they’re on the mandate, they’re going to be driving the deal.
So, my Canadian compatriots, I know this bugs many of you. You really want your US counterparts to… respect them. You want them to be concerned that perhaps the uppity Bay Street lawyers with a 20 year old relationship with the client may fill the quarterback role. You want them to realize how skilled and experienced you really are. You want them to be, frankly, a little afraid of the competition the Canadians may offer.
Are you crazy?
The biggest competitive advantage Canadian law firms over the US counterparts eyeing the Canadian market is not being taken seriously. You are not the UK: bundle all five (or six, depending on how you count) of Canada’s regional markets together, and they are nothing compared to London. You do not want the Americans to launch a full-scale assault on you. You want them to think of you as nice, inoffensive—competent in a quiet sort of way. Good to work with. Non-threatening. To not worry when you do a deal or two on both sides of the border. To not notice right away when that deal or two becomes a dozen…
You want them to keep on thinking about baseball. In the meantime, keep worrying about them taking away your work… and what you’re going to do about it. The clock is ticking.
Marzena Czarnecka is a Calgary-based freelance writer with a healthy fear of the US bar and a history of drinking with Americans in East Asian bars.