One of Silicon Valley’s largest law firms is on the hunt for Canadian lawyers with tech expertise for a planned Toronto office, the latest northern expansion by major U.S. partnerships.
In recent months, executives from Palo Alto, Calif.-based Wilson Sonsini Goodrich & Rosati have wined and dined partners at major domestic firms, offering premium pay packages to lawyers with established relationships in the innovation economy, according to multiple sources at firms that employ partners who were pitched. The Globe and Mail agreed not to name these lawyers because they are not authorized to speak on the matter.
Rival tech-focused Palo Alto law firm Cooley LLP has also hunted for Toronto talent in the past two years, including talking to a team that eventually went to a U.S. rival this spring. However, sources say Cooley halted its headhunting efforts in recent months, as what had been a red-hot sector cooled off.
Wilson Sonsini and Cooley executives declined to comment on their Canadian expansion plans.
The firms specialize in advising technology and life science companies, along with the venture capital and private equity funds that back them. Both firms have opened offices in Europe and Asia. Each is home to about 1,000 lawyers, which makes them larger than any Canadian law firm.
Partners at both Silicon Valley firms earn an average of approximately US$2.4-million each annually, according to a survey conducted by American Lawyer magazine, which is significantly more than the average compensation at Canadian firms. The U.S. firms’ annual revenues average between US$1.1-billion and US$1.5-billion.
If the U.S. firms open their doors in Toronto, they will represent a direct threat to domestic rivals.
Several large Wall Street law firms, including powerhouse Skadden, Arps, Slate, Meagher & Flom LLP, have small Toronto offices, where lawyers licensed in the United States work on U.S. transactions for clients doing cross-border business. This approach complements services offered by domestic firms, and means the U.S. lawyers frequently get deals steered their way, while sending clients doing Canadian deals to domestic lawyers.
Wilson Sonsini plans to hire Toronto lawyers who can offer Canadian legal advice to tech clients in areas such as finance, takeovers and intellectual property, in addition to providing U.S. legal services. The firm plans to have between five and 10 lawyers in its Toronto office, sources said, working from the same compensation pool as U.S. partners.
In March, Boston-based law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC took the same approach to opening a Toronto office, hiring five partners from firms that included Torys LLP and Dentons Canada LLP. Mintz recruited lawyers with expertise in life sciences, private equity and venture capital, and put them on the same pay scheme as their American colleagues. Sources say Cooley also talked to several of the lawyers who eventually went to Mintz.
A number of global law firms, including Norton Rose Fulbright and Dentons, have large Canadian partnerships. However, these firms run separate compensation pools for Canadian and U.S. lawyers.
After boom times during the COVID-19 pandemic, the North American tech sector is facing serious headwinds, with investment valuations falling and many firms laying off employees after expanding rapidly. The volume of deals is down dramatically compared to last year. Flagship lender Silicon Valley Bank collapsed in March, kicking off a financing crisis for many tech companies and investment funds.
While recent tech turmoil slowed recruiting efforts by Wilson Sonsini, with Canadian lawyers reluctant to jump ship, sources say the sector’s issues mean there are new opportunities for lawyers to advise tech clients, including an increase in restructuring assignments. Sources say lawyers who turned down the opportunity to join were concerned the Silicon Valley firms’ commitment to Canada would fade if the tech sector continues to struggle.
Wilson Sonsini is circling at a time when domestic legal heavyweights in the tech sector are bulking up on talent. In March, Osler, Hoskin & Harcourt LLP hired two innovation economy lawyers – Jean-Nicolas Delage and Christian Jacques – from the Montreal office of Fasken Martineau DuMoulin LLP. Since then, Fasken landed Montreal-based Scott Rozansky – formerly co-head of Dentons’ venture technology and emerging growth team – and Ian Palm, a Toronto-based partner who joined from the Canadian arm of global firm Gowling WLG.
“It’s a very challenging environment for emerging technology companies,” said Will Shaw, one of the co-leaders of the emerging technology and venture capital team at Fasken. “We take a long-term view of the emerging technology space and see this as an opportunity to attract talented lawyers with similar long-term mindsets.”
Osler and Fasken consistently rank as the top law firms for venture-capital transactions, according to market research firm Refinitiv.
Andrew Willis