Pierre Raymond Click here to see full sized version.

When foreign dealmakers flocked to Canada last year, they sparked an unparalleled wave of mergers and acquisitions that shows no signs of abating.

Fuelled by cash-rich investors, strong economies, low borrowing rates and high stock and commodity prices, Canada is widely perceived to be one of the world’s hottest markets for cross-border takeovers.

Last year, Canadian M&A transactions rose to their highest level since the technology boom of 2000. The combined value of takeovers involving Canadian companies almost doubled in 2006, with more than 2,800 deals worth approximately US$230-billion, according to Thomson Financial.

And that’s good news for the legal community, particularly for law firms who have positioned themselves as M&A experts such as Stikeman Elliott LLP, which unquestionably has been able to take advantage of the flood of foreign takeovers.

“Law firms are more profitable today than they have ever been because the level of M&A is so high – at least for the top tier firms,” said Pierre Raymond, the chair of the Montreal-based law firm that has over 430 lawyers working across Canada and in New York, London and Sydney.

No question Stikeman Elliott enjoyed a banner year. Indeed, Stikeman Elliott is the top-ranked Canadian law firm for corporate transactions as well as the top-ranked firm for announced Canadian M&A deals, and, completed European and Latin American M&A transactions, according to Thomson Financial. Further it was the only Canadian firm ranked in 2006 among Top U.S. Legal Advisors by Mergerstat Review for both the number and volume of announced cross-border M&A deals.

“Success comes from implementing long-term strategies,” says Raymond, one of Canada’s leading M&A lawyers and counsel to some of the world’s wealthiest dealmakers, including Saudi investor Prince al-Waleed bin Talal whose firm Kingdom Hotels acquired in one of the notable deals of the year the Fairmont Hotels & Resorts for US$5.5 billion bid, and George Gillett, the owner of the Montreal Canadiens hockey club who recently added the fabled Liverpool soccer team to his sport holdings.

“Our reputation outside the borders is that we are very smart, highly efficient, driven – and very importantly – unequivocally business-oriented. This is what we strive to be because this is our brand.”

The firm has worked hard over the years to cultivate an image as the best M&A law firm no matter what the industry — a strategy that hinges on letting its star performers shine, recruiting smartly, bolstering its international reputation and sparing no effort to tend to the needs of its clients.

It all begins, though, with talent. As Raymond puts it: “This is a people’s business and therefore it all comes down to human capital.”

That’s why the firm has shown little interest in luring one or two mega-star lawyers capable of generating business in a limited number of sectors. Instead it has adopted a strategy that focuses on developing talent in as many fields as possible while giving them very early in their careers opportunities to lead files or “to shine.”

“People are much more conscious that if they want to build an institution, a franchise, they absolutely need to leave room for the younger people to shine and to give them leadership roles in business and management,” said Raymond. “The strength of this firm lies with our unique depth of talent, from top to bottom. Our bench strength is really the envy of other firms. This is not a firm where you have a few mega-stars. We have a large number of people who are doing exceptionally well.”

Recruitment, then, is key. Stikeman Elliott used to hire only the smartest and brightest. Two years ago it realized that there was more to it than that, that its successful partners were also overachievers who were entrepreneurial and blessed with savvy business sense. After putting pen to paper a “DNA” imprint of the attributes that characterize a successful partner, Stikeman Elliott broadened its scope and began hiring students who also demonstrated ambition, initiative and past business interest, either through their selection of classes or in their extracurricular activities.

“Hiring is very, very important because we try to be very alert that today’s people are tomorrow’s brand, that our best asset is the people who constitute this brand,” said Raymond, who as chair has the responsibility of identifying and understanding the “small and bigger” challenges that lay ahead.

Always mindful that the competition spares no effort to lure its high-profile clients such as Air Canada, BCE, CIBC and CN, Stikeman Elliott has cleverly sought to build upon its traditional image as Canada’s international law firm — after all, it opened a London bureau even before setting up in Toronto. Besides helping to retain existing clients, it generates new business, and more so in today’s business environment when Canadian enterprises are the target of foreign business interests. “Over the years this reputation has led to more than our share of transactions, either with a foreign-component or cross-border,” observed Raymond.

What’s also helped is its mindful approach to customer service. A couple of years ago, Stikeman Elliott developed what it calls “client teams,” that is, teams consisting of up to 12 lawyers with different fields of expertise who tend to the needs of its high-end clients. These teams meet on a regular basis seeking to strengthen relationships with the client as well as identify new services and opportunities to assist the client.

Bringing the tax department into the fold, particularly with M&A, is key and central to its success, says Raymond. The tax department has the mandate of developing solutions that deliver significant tax efficiencies during transactions, something that it has done so exceptionally that clients have become “faithful” after benefiting from its services, says Raymond.

“Since our clients are constantly solicited, we have to give more than they demand, and just as importantly, establish an individual rapport with the clients – not only with general counsel but throughout the different layers of the client’s organization,” said Raymond.

But Raymond concedes he worries about whether the firm can sustain the pace it set last year.

“The challenge is to ensure that the people who make up this firm will five years from now still emit the energy that permeates throughout the organization today, believing that everything is possible with dedication and hard work. That’s what has made this firm successful.”