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Fraser Milner Casgrain chief Chris Pinnington called the merger ‘a transformational step in the evolution of the Canadian legal profession.’

Michelle Siu/The Globe and Mail

Fraser Milner Casgrain LLP plans to merge with two global law firms in a three-way combination that would establish a massive new international player and shake up Canada's legal industry.

FMC's partnership board has unanimously recommended a deal to the firm's partners that would see it join with London- and Washington-based SNR Denton and London's Salans, creating a 2,500-lawyer global giant with offices around the world.

If approved in votes by all of the firms' partners, the merger would see FMC and the others involved rebranded as Dentons. It would also redraw Canada's legal landscape, erasing the nameplate of one of Canada's top firms but introducing another competitor with new global reach into Canada's formerly cloistered legal marketplace.

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"It really is an opportunity for transformational change for our firm and we think frankly it's a transformational step in the evolution of the Canadian legal profession," Chris Pinnington, FMC's chief executive officer, said in an interview.

He confirmed the proposed merger Wednesday, after The Globe inquired about stories on the merger that appeared in British legal trade publications. The deal had been scheduled to be announced formally next week.

Mr. Pinnington stressed that the move was "not a takeover," but the creation of a new firm by three equal partners. He said new firm's global network will help FMC's clients that do business around the world.

The deal follows the move last year by Ogilvy Renault and Macleod Dixon to join massive London-based Norton Rose. Some say that deal marked the beginning of the globalization of Canada's legal industry, which has been rife with mega-merger rumours ever since.

Canadian legal industry observers have long pegged FMC as a possible merger target for U.S. or British mega-firms, many of which have been looking to Canada to expand as their corporate clients aim to buy into Canada's natural resources.

FMC has offices in Montreal, Ottawa, Calgary, Edmonton, Toronto and Vancouver.

SNR Denton, which has more than 1,200 lawyers, is itself the product of a 2010 merger between U.S.-based Sonnenschein Nath & Rosenthal LLP and London's Denton Wilde Sapte LLP. The firm boasts 60 locations worldwide, including associate firms and special alliances. Salans has 770 lawyers, and 20 offices around the world.

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The new global firm, they say, will be the world's seventh-largest by head count.

"We see ourselves, in doing this, as being very much a leader in the profession," Mr. Pinnington said.

FMC, which has 112 of its 557 lawyers in its Calgary office and deep roots in energy and mining, was previously rumoured to have been courted by U.S.-based DLA Piper, the world's largest law firm, with 4,200 lawyers. DLA Piper announced last year that it was talking to as many as four unnamed Canadian firms, but so far no deal has been announced.

The FMC merger could prompt renewed soul-searching among senior partners on Bay Street considering similar deals, says Jordan Furlong, a lawyer and law-firm consultant: "Now that this second major top-10 Canadian firm has, apparently, gone global as well … every large Canadian firm has to be on red alert."

In Australia, a wave of mergers involving global firms has dramatically changed the local legal market, he pointed out, predicting that Canada could soon see similar changes. (A handful of smaller Canadian firms have also recently announced cross-border mergers.)

Under the merger, FMC and the other merged firms will use what is known as a "Swiss Verein" structure that would not see their finances combined. FMC would have three of the 14 seats on the new firm's global board. If approved, the deal would take effect next year.

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