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March 5, 2009 1:30 PM

O Canada! North of the Border, Firms Avoid Layoffs

Posted by Brian Baxter

Imagine a place and time when headhunters wouldn't stop hectoring you with phone calls. Prospective employers were everywhere.

Seems like another world, doesn't it? Actually, it's just another country: our beloved, often forgotten northern neighbor. A report by The Financial Post notes that the market for lateral hires among Canadian firms remains hot, with widespread layoffs not yet a concern. Only two major Canadian firms have implemented cutbacks to attorneys and staff, while the rest of the Great White North's legal landscape remains relatively unscathed.

It turns out that Canadian law firms, much like their bailout-resistant banks, aren't nearly as leveraged as their U.S. and U.K. peers. The FP reports that Canadian firms tend to have an associate-to-partner ratio of roughly 1:1, with U.S. firms generally at 3:1 and U.K. firms as high as 5:1. As a result, Canadian firms are less driven to shed associates wholesale as they struggle to adjust to adverse economic conditions.

Despite that good news for Canadian lawyers, some economic ailments don't stop at the 49th parallel.

"It's a very uncertain time right now," Scott Jolliffe, CEO of Gowling Lafleur Henderson, told The FP. "[T]he economy has not improved; it has gotten worse. Most firms are being very careful about expenditures and expansions."

And while many of those same firms have so far weathered the downturn with aplomb, sustained economic malaise could have some firms thinking otherwise.

"We have no intention of cutting back at this point," Borden Ladner Gervais national managing partner Sean Weir told The FP. "If it's a nuclear winter in the business community, we'll have to reassess things. Come April, it might be a different story."

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I've read the particular article in the Financial Post and it relates to lateral partner movements and not associates. Associates are being laid-off here in Toronto, but it's being done much more quietly and not in one shot. Multiple firms have implemented hiring freezes as well. The carnage is certainly not as bad as with the US and UK, but firms here are doing their best to avoid making the papers – in part, because of articles like the one in the Financial Post.

If you'd like to read an article on what is happening to associates, read this one:

http://www.canadianlawyermag.com/Sweating-bullets.html

I have had multiple friends at several firms who have either had this happen or know people who have gone through this.

lang michener in vancouver also recently laid off a bunch of people - approximately 10-12 staff and 3-5 lawyers. the lawyers were given 3 months working notice and it was on the downlow. staff were paid severance and an announcment was made.

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