Canadian-based real estate developer Ivanhoé Cambridge is transferring part of its legal team to Borden Ladner Gervais in a novel deal that will see the law firm manage the legal services for the company’s Canadian shopping centers.
This is a “unique type of service arrangement for a Canadian law firm and one of its clients,” said BLG commercial real estate partner Nicole St-Louis.
The mandate of the new deal reflects the fact that BLG has “started to consider ourselves to be a leader” in the alternative legal services space in Canada with the recent launch of its BLG Beyond division, she said.
As part of the agreement, 11 members of Ivanhoé’s in-house legal team (two lawyers, five law clerks, three legal assistants, and an administrator) joined BLG Beyond’s team, which partner St-Louis, a former VP and legal counsel with grocery behemoth Loblaw, leads. With nine people in Toronto and two in Montreal, they’ll continue to focus exclusively on Ivanhoé Cambridge while at the same time doubling the size of the Beyond Leasing team.
BLG Beyond was officially launched in January but the Beyond Leasing portfolio has been around for about six years and was the springboard for the larger managed legal services offerings of the new division, said St-Louis.
Retail leasing had been St-Louis’ focus at Loblaw and when she joined BLG she wanted to create a “managed service approach to large portfolio clients” with a team exclusively dedicated to leasing, with a high degree of expertise in the work and to create process improvements and streamline it through templates and automation.
“We have a single point of contact, very streamlined intake processes, just very focused on efficiencies and technology,” which is what she said put BLG at the “forefront of the RFP process.”
The real estate company is a longtime client of BLG’s but this deal “is definitely taking our relationship to a different level,” said St-Louis.
“We wanted to choose a firm that shared our values, had a significant presence in and knowledge of the Québec and the Canadian legal landscape and leasing market and most importantly, allowed for exclusivity of services,” said Denis Boulianne, executive vice president, legal affairs, general counsel and secretary at Ivanhoé Cambridge. “So, it was important for us to find a firm that has an established and growing practice in this field. That is what we were able to achieve with BLG Beyond Leasing.”
Boulianne also said the prevailing hourly fee structure that firms charge does not easily suit itself to innovative ways of providing legal services, and that law firms and in-house legal departments should think of more fluid ways of providing legal services. BLG’s willingness to take on resources, without which it would not have been able to fulfill the mandate, enabled a viable economic solution, he said.
He added that conflicts of interest will be avoided, as the Ivanhoé teams “work exclusively for Ivanhoé Cambridge within a Chinese wall, which ensures that we maintain the same level of services while allowing other BLG professionals to represent other landlords and tenants.”
Last August, Ivanhoé Cambridge announced a strategic alliance with Jones Lang Lasalle (JLL) to transition the operations of its Canadian retail properties, and the deal with BLG allows it to “align” with the new JLL operating model. Like the deal with BLG, most of Ivanhoé Cambridge’s property team of retail employees will join JLL.
The Beyond Leasing team will manage all the “complex legal issues” arising from the operation of Ivanhoé Cambridge’s shopping centers across Canada—everything from tenants’ compliance with leases to supplier agreements to management to security, said St-Louis.
While there are law firms in the U.K. and U.S. that are quite advanced in their offerings of alternative legal services, Canada lags behind, said St-Louis. But the timing of the developer’s RFP came at just the right time when BLG was ready to expand its managed legal services team.
“It is very unique in the Canadian market. There was no other Canadian law firm that’s offering portfolio management level leasing work on this scale,” said St-Louis.
Ivanhoé Cambridge held C$60.4 billion in real estate assets as at Dec. 31, 2020 and is a real estate subsidiary of the Caisse de dépôt et placement du Québec.
With 800 lawyers, intellectual property agents and other professionals across Canada, BLG is the largest law firm by head count in the country.