Soon-to-be dissolved law firm Heenan Blaikie was profitable

Partners at Heenan Blaikie LLP chose to dissolve the venerated national law firm in spite of a highly profitable year.

Co-founding partner Roy Heenan called the closing “unnecessary” and said the firm’s revenues reached $222 million last year with a profit of about $75 million. The firm’s billings for December 2013 reached $35 million, a near-record.

“Financially we were doing fine. But everyone felt they should do a little better, or it was the fault of this office or that office. It was that type of clash,” Heenan told Allison Lampert of the Montreal Gazette.

“Once you start having the inter-office fights or the finger-pointing, the question is ‘Do you want to continue in a national partnership?’ ”

The figures, which shed new light on the break-up of one of Canada’s biggest law firms, came as founding partners who are no longer involved in the operations expressed disappointment over the decision.

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Co-founding partner Peter Blaikie released a statement Thursday saying that he is “particularly distressed” by the decision because it will disrupt the lives of hundreds of Heenan lawyers and staff members. He said he has not been a partner to the firm that bears his name for about 20 years.

“For this reason, and beyond expressing my profound sadness, I am unable to comment on the reasons which have led to the dissolution of Heenan Blaikie.”

Heenan, which served as a landing pad for former prime ministers Pierre Trudeau and Jean Chretien, has opted to wind-down its operations over the coming months.

The firm said in a statement released Wednesday evening the decision “follows an in-depth analysis of the available restructuring options in the current context of Canada’s legal services market.”

The move follows about a dozen high-profile departures as Heenan partners left for other firms, presumably taking their lucrative client lists with them.

“It’s sad for me and the remaining partners that we weren’t able to continue what Roy Heenan and Peter Blaikie and Don Johnston built,” Peter Gall, partner in the Vancouver office said in a interview.

“It’s a reflection of what a changed world it is in the legal profession, and what changes lawyers and law firms are going to have to make in order to provide good service to clients at reasonable prices.”

Large firms are chasing a declining volume of high-end business law work, Gall said. This type of legal work typically involves advising on mergers and acquisitions or other deals.

In response, some firms are moving to a boutique approach where they specialize in certain practice areas, an approach that keeps their costs down.

Others, such as Norton Rose and Dentons are becoming multinationals, hoping to woo business by offering legal offices and services around the globe.

One such firm, DLA Piper, confirmed in an email to The Star on Thursday that is “in discussions with a group of lawyers from Heenan Blaikie.” The firm has more than 4,200 lawyers around the world.

Heenan, which employs about 500 people, was profitable, Gall confirmed. “There’s no doubt that from a financial standpoint we could have stayed together. We had to really look long and hard at the future and what the legal landscape looked like and what was the best way moving forward.”

He added: “When Roy Heenan stepped down as chair, we just didn’t have the same vision and strength of leadership he had.”

Gall and five other lawyers from Heenan’s Vancouver office have established a new firm. Gall, Legge, Grant & Munroe will be a boutique operation that specializes in litigation, labour, employment and public law, Gall said.

Also acting as counsel for the new firm will be Heenan co-founder Roy Heenan and Brian Burke, general manager for the Calgary Flames and former GM for the Toronto Maple Leafs.

“If you can focus, you keep the costs down, and it’s about providing a high-end service at a reasonable cost to clients,” Gall said.