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Norton Rose in merger talks with Macleod Dixon Add to ...

Another Canadian law firm could soon be flying under a British flag.

Norton Rose Group, the British-based global law firm that swallowed up Montreal’s Ogilvy Renault LLP last year, is now in merger talks with Calgary-based Macleod Dixon LLP.

Norton Rose OR LLP, as the former Ogilvy Renault is now known, confirmed reports that it is in talks to merge with Macleod Dixon, which also issued a statement confirming the talks. Both firms declined further comment.

The move would make obvious strategic sense for Norton Rose. Before its own merger last year, Ogilvy had launched a small office with a handful of lawyers in the hypercompetitive Calgary market. But if Norton Rose could lay claim to Macleod Dixon, which has 300 lawyers and an established reputation in the oil patch, the global firm’s Canadian branch would have a much more powerful presence.

In addition to its Calgary stronghold, Macleod Dixon also has offices in Toronto; Moscow; Almaty, Kazakhstan; Bogota; and Rio de Janeiro.

Bay Street law firms have sought recently to strengthen their Calgary presence to capture work advising foreign investors on oil and gas deals there. Most recently, Torys LLP opened a new Calgary office.

But news of the Norton Rose-Macleod Dixon talks also comes amid rumours about the continuing globalization of Canada’s legal industry, which for a long time has remained largely a closed shop to foreign players.

In recent years, a new breed of massive, globe-straddling law firm, such as Norton Rose or Baltimore-based DLA Piper, both created by mergers, has come of age. And increasingly, these are eyeing Canadian law firms, and their flow of major oil and gas deals, as a new source of billable hours.

In March, the co-chairman of DLA Piper, Frank Burch, let slip that his firm was in merger talks with “three or four of the top 10” Canadian firms, although he declined to name them.

Andrew Kent, the chief executive officer of Toronto-based McMillan LLP – which itself announced a domestic merger with Lang Michener LLP last year – said competing law firms are watching Norton Rose’s moves closely.

“Macleod Dixon clearly has a very strong energy-related practice, so from the strategic perspective of Norton Rose, it’s pretty easy to understand why they would be interested in Macleod Dixon,” Mr. Kent said. “It’s a nice fit with their strategy.”

Mr. Kent said his firm was not actively seeking out foreign partners at the moment and was concentrating instead on consolidating its merger with Lang Michener.

Observers are still watching for Norton Rose’s eventual move into the U.S. When the firm, which has more than 2,600 lawyers in 39 offices worldwide, announced its deal with Ogilvy, it also declared its intention to establish an American presence, which it currently lacks. But critics have speculated that the former Ogilvy Renault may lose business as U.S. or international firms that used to refer work to Ogilvy Renault begin to balk at sending work to an international competitor.

The Norton Rose-Ogilvy deal, which was championed inside the firm by former prime minister Brian Mulroney, a senior partner, has not been the only recent British-Canadian law merger. Earlier this year, London-based Clyde & Co., a full-service law firm with a specialty in insurance law, swallowed up insurance-law boutique Nicholl Paskell-Mede, which has offices in Montreal and Toronto.

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