Gowlings chairman lays out the logic for his firm's combination with Wragges
Rivals praise Gowlings' move as ambitious Wragges gains diverse Canadian presence
July 10, 2015 at 07:29 AM
5 minute read
What's in a name? Quite a bit if you listen to R Scott Jolliffe, chairman and chief executive of Canadian law firm Gowlings. While evidence of both legacy Wragge & Co and Lawrence Graham's names will be scrapped as part of its impending merger with Gowlings announced this week – after which the firm will be known as Gowling WLG – Jolliffe claims there is good reason.
"Gowling works very well in Chinese and Japanese," he says. "For example, Gowling means tall or noble tree or forest in Chinese." He adds that the firms consulted linguistic specialists before making the decision.
It gives a clear indication of his and Wragges chief executive David Fennell's ambition for the combined firm, with plans for expansion in Asia slated as a high priority. The pair also cite continental Europe, particularly Germany, as a target for expansion as the firm looks to grow its revenue, which Jolliffe says will be "substantially in excess of £400m" from the off.
The change in name demonstrates the value Wragges places on expanding its international footprint.
|- To Canada and beyond – Wragges loses identity but expands international footprint with latest merger
While a handful of firms with a UK presence have paved the way to Canada previously, including legacy Norton Rose's merger with Canadian firms Ogilvy Renault in 2011 and Macleod Dixon in 2012; Dentons' tie-up with Canadian outfit Fraser Milner Casgrain in its three-way combination alongside Salans in 2013; and DLA Piper's merger with Vancouver firm Davis in 2015. Mid-tier Gowlings, despite having a London presence, has had a low profile to date in Europe, in contrast to the respected Wragges brand.
"This is the most important transaction since Norton Rose and DLA Piper because it is the first time that a Canadian firm has established a clear parity and equality with a large venture outside Canada," comments a partner at a rival Canadian firm. "Gowlings' name has subsequently been adopted so it is the first time that a brand name from Canada has become an internationally recognised one."
But what brought this couple together and how will they build on their current market position?
Gowlings started out as Henderson and McVeit in Ottawa, Ontario in 1887. It entered the key Canadian legal market of Toronto in 1980 following a merger and gradually expanded throughout Canada during the 1990s and early 2000s via a series of tie-ups, adding offices in Vancouver, Hamilton, Calgary and Montreal. In 2001 it merged with Toronto firm Smith Lyons to create the largest law firm in Canada by headcount, with 730 lawyers.
The firm has also targeted international expansion, launching in Russia in 1992 and London in 2008 and opening a representative office in Beijing in 2011.
Jolliffe says Wragges' existing international network made it an attractive target for Gowlings. "They have a superb network of relationships around the world that we will be able to tie our clients into," he explains.
But what is less immediately clear is what made Gowlings an attractive partner for those on the Wragges side of the deal, particularly given the difficulties it may create for future expansion into the US – a key target for any law firm with global ambitions. One partner at a UK firm expresses surprise at Wragges' Canadian move: "Canada isn't seen as a strategic priority by most firms so as a standalone proposition it is not particularly interesting, but presumably they have identified client demand otherwise they wouldn't have done it."
A former Wragges partner also questioned the logic of a Canadian tie-up: "If you're internationalising a business then, had they not been close and good friends, whether you'd start with Canada is questionable. It's not China is it? It's also not the US."
Part of the way the two firms plan to make a success of the marriage is a strong focus on their traditional sectors and strengths. Gowlings has long been particularly well regarded for its intellectual property (IP) practice and has strong Canadian and Russian offerings in the sector.
"Both firms have very strong IP practices," says Jolliffe. "Gowlings is ranked within the top five in the world; adding Wragges will clearly build on that."
Fennell is also keen to stress the sectoral approach of the combination, targeting areas such as IP, IT, telecoms, advanced manufacturing, real estate, energy and natural resources, projects and infrastructure and life sciences.
Sources in the market agree that for the new firm to make an impact it will have to focus on providing a distinctive package to sell to clients. "One thing they will have to be sharply delineated about is what it is that makes them special if they are going head-to-head with the likes of Baker & McKenzie and DLA – an Anglo-Canadian firm does not tick too many boxes," warns a UK firm senior partner.
A former Wragges partner adds: "I think [Wragges is] a brand that's been strongly associated with corporate work – and they will need to get the message across to the marketplace that this strength is within the combined organisation, albeit called Gowling WLG."
Both firms had substantial backing from their partnerships to embark on the merger, with Jolliffe saying they are unlikely to see a substantial loss of partners unhappy with the tie-up.
One Gowlings London partner that Legal Week spoke to is bullish about the merger: "I see the combination as a platform for further development; Wragges will be bigger and will get more clients, work and benefits by being seen as the top IP firm in the world.
"Wragges is the Slaughter and May of the Midlands."
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