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Heenan Blaikie LLP's "major restructuring" may come too late in the day to save the well-known national law firm from dissolution.

That's what happens in the legal biz when a trickle of key departures from the partnership ranks turns into a flood, as billing prospects dim and fear seeps through the ranks. Throw in a market notably lacking in mergers, financings and other deals that are the lifeblood of every corporate law firm of a certain size and cost structure, and you have a recipe for a meltdown.

It's a fate that awaits other mid-level law firms whose business model is no longer working in a rapidly changing environment. Firms like Heenan Blaikie are being squeezed mercilessly both from above and below – by the heavyweights chasing after business they once ignored as unworthy of their lofty status, and by more nimble specialist firms with lower expenses (including less lavish offices) and cheaper fees.

Like accounting firms and investment banks, law firms are also facing the long-predicted downdrafts emanating from the hollowing out of corporate Canada. As Canadian subsidiaries have ceded greater control to their foreign owners, a chunk of their financial and legal business in Canada has migrated to head offices in other countries.

To keep the lights on in their pricey, art-strewn digs, firms of Heenan Blaikie's size – more than 500 professionals in eight offices across Canada and another in Paris – need a steady stream of big-paying corporate clients who won't blanch at hefty legal bills. But in the wake of the global financial crisis, customers have been trying to rein in spiralling legal costs and are refusing to pay old standard rates of more than $400 an hour – and closer to $1,000 for senior partners – for what amounts to little more than low-end legal work such as document searches.

To meet these cost constraints, Canadian law firms are under pressure to invest in new technology, outsource commoditized work and increase the ratio of inexpensive associates to partners, which is well below comparable levels in Britain and the U.S.

Other firms have weathered the loss of big-billing partners and managed to turn around their flagging fortunes, typically by reinventing themselves. Energy and infrastructure financings in Western Canada, for example, proved critical in the wake of the 2008-09 crash that flattened mergers, acquisitions and securities offerings, the traditional bread and butter of the big Bay Street players.

Firms like Heenan Blaikie, which made lots of money on junior resource deals and tax shelters, often end up relying on a handful of heavy-hitters for a hefty share of their profits, which makes it harder to switch horses when conditions change dramatically.

When major U.S. law firm Dewey & LeBoeuf was going down in flames in 2012, Los Angeles lawyer and mediator Victoria Pynchon nicely summed up the evolution attitudes that made it considerably harder to salvage the ship once it began taking on too much water in rough seas.

"Law partnerships used to be like marriages – you prospered in good times and saw your partners through the bad," Ms. Pynchon wrote in a commentary for Forbes magazine. "Now law firms are like trophy wives – they don't marry for better or for worse. They marry for better. When hunger comes knocking at the door, the firm's trophy partners start looking for new homes."

As fear spreads , "you get something like a run on the bank. Just as the bank does not own its depositors' money, the firm doesn't own the partners' clients."

Unfortunately, Heenan Blaikie could be heading down the same slippery slope.