Merging Calgary’s Macleod Dixon with London-based global law firm Norton Rose creates one of the top 10 energy practices in the world, Bill Tuer said as the ink dried on the deal announced Oct. 14.
When the merger closes Jan. 1, Macleod Dixon will be a “material” addition to the Norton Rose global energy practice, said Tuer, who was global managing partner at Macleod’s and now becomes an executive committee member with Norton Rose Group. He said he can’t specify what percentage the Calgary firm will add to Norton Rose world energy billings. This, he said, is because energy clients require services in virtually all practice areas of both firms, from patents to litigation and mergers and acquisitions.
But he confirmed the deal is a “full economic merger” and not a mere referral agreement between loosely affiliated firms. Macleod Dixon adds some 300 lawyers to the Norton Rose pre-merger complement of 2,600.
Tuer confirmed that Norton Rose was not the only global firm to approach Macleod Dixon, though non-disclosure agreements keep him from revealing which others made overtures. But DLA Piper of New York and London has publicly confirmed it has talked with more than one Calgary law firm and Tuer said it’s a safe bet more than one foreign mega-firm is kicking tires on various big Calgary law offices.
“The apparent interest by international firms is fairly constant now,” Tuer said. It’s an interest generated in part by a long string of multi-billion-dollar acquisitions and joint venture investments by foreign companies in Calgary energy producers, deals which each generate thousands of billable hours for law firms involved in cementing transactions.
But Tuer said it’s difficult to predict how many large Calgary firms might eventually be drawn into international mergers.
“I think the opportunities will be there but every firm will have it’s own strategy and its own way of looking at offers. For us, and the direction we were going, this made perfect sense,” he said.
Macleod Dixon and it’s energy clients were both becoming increasingly global in their business focus and the firm had already established offices in such energy capitals as Moscow, Almaty, Bogotá and Caracas. To keep pace with client needs, it faced a decision whether to continue solo global growth or to accept a merger with a larger firm already established in important markets, such as Asia. On that basis, they had come to the conclusion that a merger could be in their future.
“We were already positioned in terms of our mindset and we were exploring opportunities” when they were approached by Norton Rose. “Given the competitive nature of the marketplace, this was the way to go,” Tuer said. But it was definitely not a case of simply merging with the first or biggest firm available.
“That would have been too generic for us.” For Macleod Dixon, he said, an acceptable merger partner had to have a globally recognized energy practice and, ideally, a strong position in Asia.
“Prior to the merger, we didn’t have any offices in Asia. That’s a big growth area for our clients and we could only do so much there. We needed a suitcase and a plane ticket and we had to work with local counsel (in Asia) — and we had done well in that mode. But it’s far more efficient to be able to just call upon those resources internally. It’s simply more efficient and cost effective for our clients.
“When we looked at Norton Rose, we were able to check all our boxes, including the people side. You have to be able to make it work on the people side. If there isn’t chemistry there, at the human level, you’re wasting your time.
“Equally, though, we were able to provide something of interest to Norton Rose,” he said. In addition to an established position in the Calgary energy sector, that included South American offices. “We have strength in Latin America,” including 15 years in Caracas and a new office in Bogotá. Partly on the basis of its Latin American practice, the World National Oil Companies Congress named Macleod Dixon its Law Firm of the Year for 2011.
For Norton Rose, it’s the second Canadian foray in a year. In November, 2010, it announced a merger with Ogilvy Renault of Montreal and Toronto.
With the addition of Macleod Dixon, Norton Rose is not only among the top 10 global energy practices but also the tenth largest law firm in the world, overall, said John Coleman, Toronto-based managing partner for Norton Rose in Canada.
Coleman said the real strength of the Macleod deal is that there were many new areas of coverage and almost no overlap. Even in Moscow, where both Norton Rose and Macleod Dixon have offices, he said, the two groups will combine seamlessly into a single office because Macleod’s people are energy specialists, while Norton Rose lawyers are financial experts.
“It’s accretive everywhere,” he said. “It’s a perfect-fitting merger from all angles.” And he confirmed that Norton Rose is especially pleased with the energy strength they gain in Calgary and Latin America.
Coleman said Macleod Dixon will be merged into a Norton Rose Group structure that sees financials merged by nation or global region in order to simplify accounting, while strategy, clients and partner evaluations are managed globally.
He said he has heard “lots of rumours” about the potential for other global firms to acquire Calgary partners. “I wouldn’t be surprised if other firms are looking to model themselves after what we’ve done there.”
Top 5 worldwide
In 2009-2010, Norton Rose billed more than 300 million pounds sterling or about $490 million, making it the 10th largest London-based international law firm by revenues.
Profit per equity partner was listed at 486,000 pounds sterling or about $780,000.
With the addition of Macleod Dixon in January, Norton Rose will have 2,900 lawyers in 43 offices worldwide, operating in 26 countries on six continents.
By number of lawyers, it will be a top-5 firm worldwide. In Canada it will have a total of 700 lawyers, making it one of the three largest firms in the country.
Norton Rose has jumped from zero presence in Canada two years ago by merging with Ogilvy Renault of Montreal and Toronto in January 2010 and then with Macleod Dixon this year.