I called the May 2009 Last Word (Lexpert) Calgary Crashing; the editors changed it to the more arrogant The Oracle of Calgary. Sometimes, when I get too full of myself (happens), I re-read this piece to deflate the ego a bit. Unedited full text, for your reading pleasure, particularly if you happen to be annoyed with me at the moment.
Last Word: Calgary Crashing
Lexpert, May 2009
By Marzena Czarnecka
A year ago, one short twelve-month past, in May 2008, as I toured Calgary law firm offices to chat with managing partners, legal dealmakers and litigation heavyweights about the Calgary legal market, we were still riding the intoxicating boom. Oil had passed $125 a barrel and headlines predicting its ascent to $200 in six months were everywhere. Gas prices, critical to Alberta, were finally on the rise too, and while the US was officially in recession and the credit markets sucked big time, we were all still stoked and high. The thesis of my story, if I can bear to remember it, was that Calgary was poised to eclipse Toronto in its relative importance to a national law firm platform, and that the Canadian chapter of the next stage of law firm evolution, which would be ruled by international, not domestic, contacts and clients, would be fought primarily in Calgary, not Toronto.
Yeah. Now, no one’s suggested that it’s all my fault and Zeus decided to pummel the energy stocks precisely to punish me—and my heady informants—but gosh. Was I just a trifle too arrogant? Just a trifle? Hard to believe it was just a year ago.
In August 2008, I bent the ears of the brain trusts at Edmonton, Saskatoon, Regina and Winnipeg law firms, all of which were reaping the benefits of the Western boom. By this time, it was abundantly clear that the party in Ontario et al. was over and that the US financial crisis was going to affect us all. But not very much. We were buffeted by all sorts of things: like, no matter what happened, the world was still addicted to fossil fuels and running out of them, and a $5 or $10 drop in the price of oil wasn’t going to bring the oil sands to a grinding halt, thank you very much.
I filed a “Boom on the Prairies” story mid-September, at pretty much the same time the capital markets went psychotic. I found myself rewriting it as Lexpert was going to press, buffeting the optimism and long-term view of prosperity that was the rule in August against the panicked, “the world is going to hell and we don’t know what to do, help!” mood of the fall of 2008. Zeus did not personally strike me down with a thunderbolt, but he strongly recommended I leave the tasks of sooth-saying and fortune-telling to the likes of the Oracle at Delphi.
But old habits die hard, and I’ve got some Cassandrian predictions to make. I don’t recommend you believe them. I don’t recommend you believe anyone’s predictions, frankly, be they the dudes at Goldman Sachs who were predicting $200 oil or the pessimists at The Economist who had us looking to $5 oil back in the 1980s.
Prediction one, from a seasoned Calgarian: it’s a cyclical thing. We will rise again, like the Phoenix, from a funeral pyre at least partly of our own making. I don’t think we pissed away this boom the way we had our first psychedlic party in the early 1980s, but we sure didn’t do everything we ought to have… Still. It’s a cyclical thing. And when we rise again, Calgary will eclipse Toronto in its relative importance to a national law firm platform.
(I know, some people never learn. Take that, Zeus.)
(I’ll give you a caveat: unless we totally piss away the bust. But I don’t think we will. At least some of us learn, a little. We’ve got a plan. OK, I don’t have a plan, but I was talking with some guys last week who do. Just wait.)
Prediction two: Supremacy on Bay Street will be tied directly to law firms’ connections to and clout in New York, and the firms that manage to stay the course and continue their investment in New York offices and relationships.
Prediction three: Most law firms are exceedingly short-sighted and they’re going to muck it up. Canadian partners who took a hit as a result of New York or cross-border-tied sub-performance will advocate retrenching and hunkering down. As a result, they will in the long-term weaken Toronto, contributing finally to the fulfillment of prediction one.
Prediction four: Law firms with substantial clout in both Calgary and Toronto are going to experience—are probably experiencing right now as I write and you read—unprecedented tension between their Calgary and Toronto offices. It’s going to be nasty, it’s going to be ugly, it will spill over to fights among other offices, and some national partnerships will not survive.
And, finally, prediction five: When the dust settles, and Calgary rises like a Phoenix from the ashes of the fossil fuel economy (yeah, I’m day dreaming now, whatever, I told you not to believe me), the Canadian legal landscape will be dramatically different. At least one—and I rather think two—of the Bay Street-anchored Seven Sisters will be gone. The second-tier of national law firms will be reduced dramatically, particularly among the Frankenfirms. One of them at least will be gone completely, and the only thing that’s uncertain is whether it will be its Toronto or Calgary office that will be the initiator on pulling the plug. Two others, I think, will re-regionalize and attempt to reinvent themselves as mid-market firms—whether for better or for worse, even I’m not cocksure enough to say.
And nobody will emerge from the experience any humbler. Or wiser.
Marzena Czarnecka lives, writes and offers unreliable fortune-telling services in the cyclical, cynical and currently clinically depressed city of Calgary.