Gowling WLG's strategy for growth

Peter Lukasiewicz, recently named CEO of Gowling WLG Canada, speaks to Yves Faguy about how the merger with UK firm Wragge Lawrence Graham & Co came about, plans for future growth, and the state of the Canadian legal marketplace.

CBA National: Does the merger with Wragge Lawrence Graham & Co mark a change in Gowlings’ strategy in growing its presence internationally?

Peter Lukasiewicz: Our strategy as a firm, from the late nineties, was to build a pan-Canadian, international Canadian law firm. Roughly 18 months ago, as part of our strategic planning, we began to debate the question amongst the partnership. “Do we want to grow internationally? And if so, how do we want to grow?” What came out of that process was, one: “Yes, we, as a firm, will grow internationally.” That was very firmly and forcefully put. Number two: We want to grow internationally on our own terms. We didn’t want to pursue international growth by being acquired by another already existing international law firm and become its outpost in Canada. We wanted to grow by teaming up with another partner who was much like us, who shared our culture, our values, our strategy, our approach to the practice of law. Thirdly, we would not grow in the United States.

N: Why not?

PL: A significant amount of our business comes from the United States. And when we looked at our business, two things came from that examination. Number one, it was hard to see how combining with any single firm could conceivably replace the flow of work that we get both from our partner law firms in the U.S. and from clients directly in the U.S. And secondly, as a Canadian law firm, we asked ourselves: “Is that really the best strategic move to go into such an incredibly competitive marketplace where there are already a number of dominant players versus a strategy of continuing to work with our friends in the U.S.?”

N: What is your view of the state of the Canadian legal marketplace?

PL: Our assessment on the Canadian marketplace is – and it’s not a unitary marketplace – is that it is stagnant to shrinking. Why is that? It is because there are new entrants into the marketplace. Who are they? New entrants are variously non-Canadian law firms that are now doing work that was traditionally done by Canadian law firms. Even though these firms do not have bricks and mortar operations, in Canada, they are nonetheless doing what, 10 or 15 years ago, would have been considered Canadian legal work, but they’re able to do it from wherever they are – in the UK, the U.S., Asia. Another change is that some work is increasingly being done in-house. All firms, I think, have to assess their strategy and our decision was to remain strong in Canada but to seek work outside of Canada; that is to, if you like, take the battle to our competitors and, hence, the decision to pursue international growth and to combine with Wragge Lawrence Graham.

N: Did the liberalization of the legal market in the UK, with the emergence of alternative business structures, play a part in your decision to look for a UK partner?

PL: It hasn’t been a significant factor. The number of firms that have adopted an ABS, for example, or gone and became public is very limited. And it appears to be limited to firms who are in particular practices, mostly in the personal injury practice. I don’t think it’s had the impact that some thought it would have. It was advanced by proponents as a way of improving access to justice. Candidly, I’m not persuaded that there’s any evidence that it has improved access to justice. It’s made some firms that practise in a particular area more efficient in terms of how they deliver services, but I’m not so sure it’s improved access to justice. I don’t see on the horizon any of the large firms moving to becoming publicly owned. There are significant questions of confidentiality of information that arise when you contemplate non-professional owners of a law firm. There are also potential issues of conflict.

N: Where do you expect Gowling WLG will expand next?

PL: We think there are significant opportunities in the German market and in the Continental European market. I think our expansion will either be there or somewhere in Asia-Pacific. Wragge Lawrence Graham currently has a small office in Guangzhou, focused principally on intellectual property. We have a representative office in Beijing. Wragge Lawrence Graham has a small office in Singapore. I could see that our expansion could equally occur somewhere in the Asia-Pacific market. 

This interview was edited and condensed for publication.