Oil price plunge spurs restructuring shift at Canada banks, law firms
By Euan Rocha and John Tilak
TORONTO (Reuters) - The oil price crash of the past year and a half is forcing Canadian investment banks and corporate law firms that profited from mergers and acquisitions, and financing deals during good times to focus instead on restructuring and asset sale work.
The trend is reshaping the staffing makeup at these banks, law and accounting firms, especially in the energy-dependent Western Canadian province of Alberta, with bankruptcy expertise in high demand even as the broader industry suffers.
Josef Krüger, a senior insolvency lawyer at Borden, Ladner, Gervais in Calgary, said his firm has five times as many lawyers working on insolvency files as it did two years ago.
"My concern had long been that we didn't have good files on which to train young insolvency lawyers. Well, that's changed."
While some law firms are hiring these experts externally, many are simply shifting colleagues from other practice areas.
"We're redeploying resources," said Howard Gorman a partner with Norton Rose Fulbright in Calgary. "A banking associate who would typically be doing loan originations, is now assisting on restructurings."
A similar trend is evident in Houston, where banks and law firms are also bulking up their restructuring teams.
"Restructuring is going to be a very prominent theme given the challenges the energy sector is experiencing and our team is very busy in that regard," said John Armstrong, head of Canadian M&A at BMO Capital Markets. Continued...