Vol. 13 No. 3 (March 2003)

 

STIKEMAN ELLIOTT: THE FIRST 50 YEARS by Richard W. Pound.  Montreal & Kingston: McGill-Queen’s University Press, 2002.  559 pp.  Cloth $60.00.  ISBN 0-7735-2411-8.

 

Reviewed by Denis N. Magnusson, Professor Emeritus, Faculty of Law, Queen’s University at Kingston, Ontario, Canada.  Email: magnussd@qsilver.queensu.ca.

 

This book relates the 50-year history of what is now one of Canada’s largest law firms, Stikeman Elliott.  This firm, established in 1951 as a two-person Montreal partnership specializing in tax law, has grown to a major legal advisor to business.  It has more than 440 lawyer-members, Canadian offices in Montreal, Toronto, Ottawa, Calgary and Vancouver, and international offices in London, New York, Hong Kong and Sydney.

 

The author, Richard W. Pound, is a long-time member of the firm.  Mr. Pound is also Chancellor of McGill University.  He was regarded as the second most powerful member of the International Olympic Committee until he resigned in mid-2001 after losing the election to replace Juan Antonio Samaranch as the head of the IOC.

 

This book was published to celebrate the firm’s 50th anniversary.  As a prominent, long-serving and continuing member of the firm, the author is understandably determined to present a very positive picture of the firm’s past, present and future.  The book’s chief audiences will be current and past members of the firm, and current or could-be clients of the firm who will be likely be given the book in the firm’s marketing efforts.

 

In his preface, Pound asserts that “the firm has been scrupulous in not imposing any restrictions on the expression of [Pound’s] opinion[s]” in the book.  However, Pound also notes the inherent legal, professional and competitive constraints on a member of a law firm in writing about his own firm:

The nature of the professional relationships . . . is such that client confidences must be kept . . . , which inhibits disclosure of many fascinating details.  I have tried to walk the line in such matters and to discuss only matters that are already within the public domain or for which clients have given their consent.  Internal matters are less subject to such considerations, but again, I have tried not to disclose certain purely personal information.

These externally and internally imposed constraints may be illustrated by Pound’s failure to make any reference to a high-profile case in which he was counsel, SPECIAL RISKS v. CANADA (MINISTER OF NATIONAL REVENUE), which Pound took to trial in 1983 and to appeal in 1985 before the Federal Court.  The Canadian public might be curious about whether Mr. Pound could shed further light on the case and its surrounding circumstances.  That case was described by Stevie Cameron in her successful book, BLUE TRUST (1998).  Cameron’s book is a biography of Bruce Verchere, a high-flying, high-profile tax lawyer whose clients included a Prime Minister of Canada, and of his computer-entrepreneur wife Lynne.  Bruce Verchere was a member of Stikeman Elliot from 1967 to 1973.  The fly-leaf of BLUE TRUST aptly describes that book as “a compelling true story of ambition, excess and revenge . . . a complex tale of high tragedy, told by one of the most admired chroniclers of [Canadian] times.”  Pound dismisses Cameron’s book in a footnote as a “partially complete and only partially accurate description of Verchere’s career . . .”  Pound does not offer to remedy Cameron’s alleged deficiencies in his book. 

 

Verchere was ousted from the Stikeman Elliot firm in 1973 when he attempted a clumsy coup to replace Heward Stikeman as a leader of the firm.  Pound does provide a brief account of Verchere’s attempted coup and ouster.

 

Sometime after Verchere had left the Stikeman Elliot firm and had created a competing tax and business law firm in Montreal, Verchere structured a tax avoidance scheme for a prominent Montreal client that was later challenged by the government.  After seven unsuccessful court proceedings in an attempt to defend the scheme, the client took the case away from Verchere’s firm and turned to Stikeman Elliot and to Mr. Pound for representation.  Pound, as noted, represented the client in this matter in two more unsuccessful court proceedings.  The scheme that Verchere had structured was described by the courts as “incredible,” “misrepresentation,” “fraud,” and “sham.”  Stevie Cameron relates in BLUE TRUST that the case and its implications for Verchere’s reputation as a tax lawyer weighed very heavily on Verchere and that it was a contributing factor to Verchere’s eventual suicide.

 

Pound’s book is not completely an unqualified encomium of the firm.  For example, some cases lost are noted as well as the numerous case triumphs; the departure of a few firm members that the firm would rather not have lost is acknowledged; and that a couple of branch office projects, notably Budapest and Singapore, did not “take” as long-term successes, is conceded.  Further, the obvious success of the firm over the past 50 years must be recognized, which success is fairly reflected in Pound’s book.  Nevertheless, a reader may wonder whether Pound refrains from discussing matters, even those already in the public domain, which might recall controversies affecting the firm.  Pound’s treatment of his firm is very controlled.

 

That Pound’s book is not an example of disinterested, objective and investigative scholarship does not preclude it from being of value to researchers and commentators in the future.  Historians and political scientists are used to mining the auto-bibliographical apologia of prominent public figures for illumination of historical political events.  Pound’s book, describing a prominent Canadian law firm dealing with issues of larger import than the fate of a particular law firm, may prove to be a lode for those who seek to understand the important economic, social and political role of major Canadian law firms in the latter half of the 20th century.

 

The Stikeman Elliot story illuminates issues of efficient law firm scale and scope, as the original “boutique” specialized tax practice contemplated and then implemented expansion to a large, “full-service” business law firm.  The firm also had to deal with the implications of what may be the most important Canadian political issue of the past 50 years – the effort to transform Quebec province, if not into an independent francophone state, at least into a distinct francophone society within North America.  Stikeman Elliot was founded by two anglophones to serve the Canadian anglo business establishment then headquartered in the historic but already declining centre of Canadian big business, Montreal.  Soon, the firm faced the transformation of Quebec, and thus Montreal, into a society in which local power and wealth spoke French, and which was increasingly split from the much larger, more prosperous, anglophone “rest-of-Canada.”  As the centre of gravity of Canadian business shifted to Toronto and further west, the firm had to confront whether and how to shift its centre of gravity to conform to the emerging Canadian business reality.

 

In Canada, as in the U.S., the legal profession is organized on a federally decentralized basis – membership in the legal profession is governed by provincial regulation, as it is in the U.S. by state regulation.  In both countries, historically this has meant that law firms were limited to practice within one province or state, and in practice usually to one city or community.  Over time, the needs of business clients operating on a national scale were thought to demand legal services from law firms which also operated on a national scale.  Firms such as Stikeman Elliot faced the challenge of whether and how to overcome the long-time and strongly entrenched localized nature of law practice in expanding their practices to a national scale.

 

Further, Canadian law firms such as Stikeman Elliott, like many other law firms in Canada and elsewhere, had to face the implications of the increasing globalization of the operations of their business clients.  Stikeman Elliot was one of the first Canadian law firms to conclude that the intensified internationalization of their clients’ businesses required the law firm to operate on an international scale.  Pound’s recitation of the Stikeman Elliot experience sheds some light on the challenges posed by business client globalization for Canadian law firms, whose historic practice had been focused on the Canadian activities of national and international businesses.

 

For students of Canadian politics, Pound’s book adverts to an intriguing issue – the close connection of the legal profession, increasingly in the form of the major law firms, to Canadian political governance.  Obviously, the law firms, though less obviously the major law firms, will supply personnel for the judicial branch of government – Stikeman Elliot produced a Justice of the Supreme Court of Canada as well as appointees to lower-level superior courts.  The legal profession is statistically grossly over-represented in the pre-election and post-election employment of legislators, whether of the federal Parliament or the provincial legislatures, and Pound notes a number of examples of future and former legislators being members of his firm.  In the executive, of the twenty Prime Ministers of Canada, fourteen have been lawyers, including one who had been a member of Stikeman Elliott, and there is a statistical over-representation of the legal profession among other Cabinet ministers, federal and provincial, Pound noting several members of his firm who have held important Cabinet offices.  Judicial appointments, elected legislators and cabinet appointments are merely the tip of the governing iceberg in relation to the backroom organizers, campaign strategists, and lobbyists, who are lawyers, and Pound includes reference, among others, to a senior member of his firm who served as Chief-of-Staff to a Canadian Prime Minister.

 

REFERENCES

 

Cameron, Stevie.  1998. BLUE TRUST: THE AUTHOR, THE LAWYER, HIS WIFE, AND HER MONEY.  Toronto: Macfarlane Walter & Ross.

 

CASE REFERENCES

SPECIAL RISKS v. CANADA (MINISTER OF NATIONAL REVENUE), Can. Tax Cases 553, 84 Dominion Tax Cases 6505 (F.C.T.D.) (1984), aff’d. 1 Can. Tax Cases 201, 86 Dominion Tax Cases 6035 (F.C.A.) (1986).

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Copyright 2003 by the author, Denis N. Magnusson.