LAW REVIEWCALGARY

a special publication on business law by the calgary herald June 22, 2012www.calgaryherald.com/business/lawreview

law schools rise to challenge of training lawyers

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Law and politics –a natural match

say experts

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calgary lawyersshare passion

for career

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Calgary at the core of global energy deals

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INSIDE:

Calgary lawyer Tom Valentine, for Norton Rose, once flew to Doha, Qatar for one hour to

make an important introduction for a client — and then flew home. The upside, he says, was a happy client and no jet lag.

A passionate cyclist and mountain-eer, Valentine confesses he has 60 pounds of “law books that nobody ever reads” on more or less permanent loan from the Norton Rose law library. He keeps them in a backpack and lugs them up and down the 45 floors of the Canterra Tower stairwell as part of his training to climb Nepal’s 18,000-foot Ama Dablam this fall.

One of two international road war-riors with the Calgary office of Norton Rose (formerly Macleod Dixon), he reckons lawyering, cycling and climb-ing have taken him to more than 100 countries. He says spends 12 to 15 days per month out of the country, but that’s a break from his younger days, when he travelled 20 to 22 days a month.

In 2003-04, Valentine served as senior counsel (projects) with Qatar Petroleum, and he frequently works to train government officials in new oil and gas jurisdictions on how to establish royalty, tax and regulatory regimes. Each year, he delivers lec-tures and workshops on natural gas and LNG contracts in Doha, London, Dubai, Trinidad, Singapore and Rio de Janeiro.

You’re the Norton Rose road warrior. How many countries have you seen in the course of your legal career?

Firstly, it’s both Jay (Park) and I. Jay is on the road an awful lot and he does the same type of work. But between work and adventure travels, it’s over 100 countries for me. I have a little box of currency. I take one note of currency from every country I visit as a bit of a memento.

It really stems back to right after law school. I was reading a book on Churchill, The Last Lion (by William Manchester), and I said, “Look at Churchill, he’s done all these things at 24. I’m 24 and I haven’t seen the world.” So, when I finished law school, I wrote to Macleod Dixon and I said, “I’d like to defer my articles and I’d like to go to India and teach school.”

So, I bought a ticket and I flew to London, never having been outside of Canada. I explored London and I said, “What could be more exotic than this?” Then I flew to Kuwait City and explored Kuwait City, and I said, “What could be more exotic than this?” And then I caught a flight to New Delhi and I said, “This has been a huge mistake ….” (Laughs) But after a week or so, I travelled up to Darjeeling, which is in the foothills of the Himalayas, right across from Kangchenjunga, and there’s a little orphanage there that my mom and dad had helped build 30 years earlier. So I went there and spent four months as a school teacher, a worker, a visitor. And that really kindled the fire.

A year later, my wife and I got mar-ried and I said to Samantha, “What do you want to do for a honeymoon? How about hitchhiking across Africa?” And off we went. Guys used to joke that I had picked the honeymoon first and found the bride who would go along with it. So we travelled to Nairobi and we hitchhiked all across North Africa — lived in a little tent. We spent $800 for that four months.

That was really exciting. And then I came back and articled at Macleod Dixon. I said, “Thanks very much for the articles, I’d like to take a year off.” They said, “Are you kidding?” So then we moved to London and I did a Mas-ter’s (of Law) at the London School of Economics. And then, when we were in London, we canoed down the Ama-zon, we travelled across Egypt — in fact, I think our first Christmas as hus-band and wife, we went riding horses around the pyramids.

You know, Macleod Dixon was very supportive, but I knew that once a fam-ily came along, we wouldn’t be able to do these trips. So we travelled by jeep across Pakistan and we went back across India again.

But when we started having kids, we stayed put.

And then, at some point, I was look-ing for a little bit more adventure, so

we sold everything and moved to the Middle East. We moved to Qatar. So we had four little kids, under the age of seven at the time, and we lived in Doha. And, again, that just gave us a great opportunity to see the world.

Also, by that time I had realized that the future of energy was either unconventional oil, which is oilsands, unconventional gas, which is liquefied natural gas (LNG), and international operations. So by moving to Qatar, I could learn two of the three. I could learn LNG and I could also get a sense of the Middle East.

This world-travel thing didn’t happen by accident.

No. And, in fact, the firm was quite good in that way (including a sabbati-cal program). I had been a barrister (courtroom lawyer) in energy issues and was looking to try something new.

And so, by moving internationally, your barrister skills come in handy, but I was moving more toward project counsel than barrister.

What does project counsel involve? A good example would be in Kabul,

in Afghanistan. There’s the U.S. gov-ernment looking at Afghanistan and saying, ‘What can we do to help sta-bilize the economy here? Let’s look at energy issues.’ They wanted somebody to come over and do some training to the ministry. So that’s what I did. I went over for a week and you … talk with them about royalty regimes, technical issues and oil and gas legislation. And you talk with them about environmen-tal issues — a regulatory regime that works and a fiscal regime that works — and those that don’t.

Between work and adventure travel that take him around the globe, Calgary lawyer Tom Valentine of Norton Rose has seen more than 100 countries. He spends an average of 12 to 15 days a month outside of the country.

INTERVIEW BY BRIAN BURTONPHOTOS BY WIL ANDRUSCHAK

London, Dubai, Rio – it’s a typical day at the office for Calgary lawyer Tom Valentine Road warrior

See GRIND, Page 2 See PERFORMANCE, Page 4

BY BRIAN BURTON

It was like a tsunami in slow mo-tion. You could see it coming from a long way off, but it was no

less stunning when it finally struck.The CEO and five board members of

Calgary-based Canadian Pacific Rail-way were swept from office in a sudden capitulation just hours before the com-pany’s annual general meeting.

Shareholders, led by U.S. hedge fund Pershing Square Capital, had demanded change and they got it in spades, using the threat of a proxy fight to enforce their will on one of Canada’s oldest corporate icons.

Proxy fights — lining up vot-ing rights owned by like-minded shareholders to force change on an unwilling company — have become increasingly common in Canada. Statistics kept by Kingsdale Share-holder Services of Toronto show proxy fights, which numbered just six across Canada in 2003, climbed steadily to 25 in 2008 and then shot to 43 in the recession year of 2009, before dropping to 20 in 2010 and 21 in 2011.

Since 2003, there have been 169 such actions in Canada. But the CPR struggle was one of just 14 in Calgary during that time, and certainly the larg-

est so far. Now, lawyers who act for both incum-bent management and dissident shareholders in these battles say the wave of share-holder activism is likely to make a bigger impact in

Canada’s second largest head-office city in coming years.

“I’ve lived it in full colour,” No-ralee Bradley says of the rise in proxy battles. A partner with Osler, Hoskin & Harcourt, her most recent proxy fight involved acting for dissident share-holders in a successful bid to change out the majority of board members at Helix Biopharma in Toronto.

Bradley says there are several reasons for the rise of shareholder activism. The Enron and Worldcom scandals of a decade ago put greater emphasis on corporate governance and director independence. Share-holder impatience has also been fired by the recent downturn in stock mar-kets worldwide, as well as by greater public access to information on ris-ing executive compensation. And changes in Canadian corporate law have made it easier for disgruntled shareholders to take effective action, Bradley says:

n a request by five per cent of shareholders can now compel a com-pany to call a shareholder meeting;

n proxies can now be solicited by an unhappy shareholder through informal public statements such as press releases, without issuing a for-mal dissident proxy circular; and,

n a dissident can now privately solicit proxies from up to 15 share-holders before going public with a proxy circular.

Proxy battles: the rise of

shareholder activism

Noralee Bradley

The

CALGARY LAW REVIEW2

You’ve set out very clearly to have an international career, with a lot of travel. Does that get to be a grind?

Yeah, it does. But it’s still very interesting. For example, in Dubai (UAE), you can do three or four days of work and then you go for a bike ride across the desert with some cyclists.

Ordinarily, you wouldn’t be able to get to Kabul, in Afghanistan. Ordinarily, you wouldn’t be able to travel to Brazil two or three times a year.

It’s easier now that the kids are older. When we were in Qatar, it was right during the Gulf War, so it was really a stressful time. A lot of the expats were being evacuated. We stayed there, but the ExxonMobils and the Totals of the world couldn’t travel to the Middle East. Instead, I travelled to London, Paris and New Delhi for meetings. So, I always tell the joke that, at the end of our time in Doha, when my wife and I sat down and talked about renewal (of his government contract), it was one-to-one and I lost the vote. So we came back home.

She quite rightly pointed out that, in any given month, I was probably away 22 days. So it became difficult.

But now, the kids are older. The challenge is, really, Calgary is a long way from everywhere. It helps now that we (Norton Rose) have an international presence in more than 40 countries, so you can identify opportunities, develop opportunities and then maximize those opportuni-ties using your Australian partners or your London-based partners or your people in South America or Russia. That reduces it (travel), but it doesn’t eliminate it. There’s still a lot of travel.

How many days a month would you say you’re out of the country now?

Well, I would probably be away 12 to 15 days a month. I think it’s about half time. You know, some months are heavier than others.

Does travel still hold the same charm for you, or is it different?

I would say it still holds the same charm. It’s getting more and more interesting. Certainly the last five years, there’s been an increasing demand for training, for lecturing and for teaching. And so, govern-ments phone up and say, “Can you help us develop our regime?” The Afghan project is a perfect example. The Somalia project is another good example. And so you see your project experience evolving from being more of a doer to being more of a teacher, more of a provider of guidance.

If you were advising law students, how would you advise them to pro-ceed?

I would recommend they un-derstand the technical side of the industry. Those people who have an engineering background, a geology background, a corporate finance background, they will find it really valuable as they develop this type of practice. So the first thing I would look at is you really have to have a good set of tools going into study law. So your first degree would be important.

The second thing is, you have to have a certain mindset. I mean, I’ve

got a brother who is a doctor. He says, “You spend time and energy going to places that I wouldn’t go if you paid me.” So, you have to have a certain mindset that says, this is an adventure, because some of these assignments are tough.

And some of them are dangerous. I mean, when you travel into Kabul, you’re met with big, strong South African bodyguards. And they give you a security briefing and they show you where your bulletproof vest is and show you where all the weaponry is and they show you the aerial-surveillance team that’s fol-lowing you as you move from the airport to the base. And that’s not everybody’s comfort zone.

Yemen, for example: very pro-spective, but very challenging. Afghanistan: maybe less prospec-tive and even more challenging. The Dubais and the Dohas of the world are pretty easy these days, as are the Rios and the Caracases. But you still have to pay attention. There’s no doubt about it.

How do you juggle the family com-mitment and the huge grind?

You have to have an understand-ing spouse — there’s no doubt. Your wife or husband has to be comfort-able with you being away and being able to manage the house and the family and everything while you’re away for two or three weeks at a time. And when you’re in the coun-try you’ve got to be engaged.

(When you’re home) you have to be able to do the soccer and do the hockey and football and do the homework. And sometimes it’s tough. I remember trying to explain fractions to my daughter by Black-berry. It’s the middle of the night in Dubai and she’s getting ready for her exam. So you have to be commit-ted. But there’s lots of dads in lots of homes out there who are equally committed.

At the end of the day, you know, you sit back and say, ‘Is it an inter-esting existence?’ I try to have two adventures every year. One in the mountains and one doing something else.

I’ve got this bike ride from Malta to Paris in July — 550 km in three days. It forces you to get to the gym every day and that forces you to keep life interesting. Same thing this fall. That’ll be my trip to Nepal to climb some big mountains ... the one that’s on the target is Ama Dablam. But it’s conditional upon getting more life insurance and that’s be-coming a challenge.

How much has Calgary’s emergence on the global energy scene been important to your own travels and adventures?

I’d say it’s huge. In the old days, you used to go to a meeting and you’d tell the people you’re from Calgary and they’d pause and you’d have to remind them about the (1988) Winter Olympics.

Today, they know you. Today they know Alberta. And it’s not the case that you have to go out and meet in London, meet in New York, meet in Singapore. They’re coming to Cal-gary. They’re doing the deals here.

The shift is huge and it’s re-ally been the development of our unconventional resources, which are now seen as our conventional resources. The Indonesians, and the Chinese and the Japanese and the people from the Middle East, they all know Calgary. They all want to

get a piece of Alberta. So, it’s really a Renaissance. It’s really a rebirth. It was a good, solid industry when it was a conventional energy industry and, today, it’s a really dynamic and highly sought-after spot.

The logic of energy has in the past been, certainly for oil, that it’s a global commodity. You can produce it here, sell it here and, if you’re a foreign investor you can take the money and buy energy somewhere else. But it’s even happening now in oil — that there is a continental (price) differential developing. Is that leading to an interest by foreign investors in taking the raw resource home?

... you see this particularly out of Asia because there, decisions are not made in terms of shareholders. Decisions are made in terms of se-curity of supply. And if you look at LNG, for example, when they first looked at that in Japan, the price premium that they had to pay for natural gas, as opposed to coal, for the production of electricity, was huge. It was a very significant price premium. But the government of Japan made a conscious decision to explore LNG as their source of energy for security reasons — for strategic reasons. And so, on that basis, you see Chinese investors and you see Indian investors and they look at things differently than a conventional E&P (exploration and production) company, that’s driven by shareholder return.

The differential in gas has become huge, between Japan paying up-wards of $10 to $14 an mcf (thou-sand cubic feet) and looking at gas here (North America) at $2. There’s a huge advantage if they can pro-duce that gas here and move it to Japan. How long are they going to wait for us to get our act together on pipelines to the coast?

Well, that’s a critical driver. Canada moves cautiously, but more effectively and more efficiently than most of the world. But they won’t wait forever. And that’s why the government looked consciously at that (project-review) process and made the modifications in the recent budget that it did. I do think it’s got to be done on a timely basis. Other-wise, the opportunity is lost. They’ll look elsewhere. Australia is very anxious to produce some of their unconventional gas and get it into the Asian market.

Alberta, right now, is a little bit oil fixated — because of the North American gas glut. One gets the sense from talking with you that Asia, in particular, is not. That gas is very important to them, both as an energy source and, possibly, envi-ronmentally.

Absolutely. And you see it all over the world. You see it from the lenders. The lenders are looking at ways to ensure these projects are minimizing venting and flaring. And so, in the old days, that gas used to go up the flare stack. Today, if you want to finance your project, you have to have a solution for that gas. People around the world are looking to natural gas increasingly. And you can see that from the statistics. You can see it from the growth. It’s seen as more environmentally friendly and it’s also seen as more and more abundant. And so, on that basis, there’s a big move afoot to try to convert to natural gas.

BY BRIAN BURTON

As a city of only one million people, Calgary is “punching way above its weight” in inter-

national business circles, says mergers and acquisitions lawyer Craig Hoskins of Norton Rose.

“Calgary is a real core part of what’s happening globally in the energy sec-tor,” Hoskins says.

The “sheer scale” of Canadian en-ergy resources is the most important of several factors attracting tens of bil-lions of dollars in foreign investment through a fairly constant stream of transactions, he says. “Asian countries are looking for long-term supply and we’re as big as it gets.”

The resulting infusion of foreign cash is, of course, supple-mented by billions of dollars worth of domestic deal-making. And each deal, foreign or domestic, adds to the millions in fees earned by the Calgary law firms who put those deals together.

The Bloomberg business news agency says investment in the Canadian oil patch by Chinese companies alone is approaching $30 billion over the past five years. Other big spenders come from Malaysia, India, South Korea, Thailand, Norway and France. The French oil giant, Total, re-cently partnered with Calgary-based Suncor to advance three oilsands joint-venture projects very conservatively estimated to cost $20 billion over the next decade.

John Kousinioris, M&A leader with the Calgary-based law firm Bennett Jones, says oil and gas activity made up half of the $135.5 billion in acquisi-tions in Canada in 2009, but declined to 20 per cent of the $168 billion worth of deals done last year. Low natural gas prices turned 2011 into a wait-and-see year for domestic deals, Kousinioris says. But it’s now clear that gas prices are staying low and this may put pres-sure on some gas-weighted domestic companies to complete contemplated mergers. And low gas prices may also be a magnet for foreign acquisitions. On the other side of the coin, high oil prices could also trigger deals because Canadian share valuations are low, relative to the value of reserves held by many companies.

He expects domestic deals will tend to be done in shares, especially by gas-weighted companies that are mostly short on cash, while state-owned for-eign companies will continue to pump cash into the Canadian energy sector.

Hoskins and Kousinioris have been inside players in some of the biggest, most complex and important deals in the past year.

The $2.2-billion acquisition of OPTI Canada by the Chinese National Off-shore Oil Company (CNOOC) in July 2011 undoubtedly ranks among the most complex deals in some time, says Hoskins, who represented OPTI.

Borrowing a phrase from one of his Norton Rose colleagues, Hoskins says financially troubled OPTI had “boiled the oceans” looking for a buyer, with no success. OPTI owned 35 per cent of the Long Lake oilsands steam injection and upgrading project in partnership with project operator Nexen Inc. But Long Lake production was slow to ramp up and OPTI was starved for cash.

Finding no buyer, OPTI was pro-ceeding to negotiate with its bondhold-ers on a deal that would have acknowl-edged the destruction of shareholder equity and recapitalized the company with new infusions of cash from bond-holders. After intensive negotiations Norton Rose, OPTI and its bondhold-ers were proceeding down the road to recapitalization when CNOOC arrived on the scene with an offer to purchase the struggling company.

The CNOOC offer was better for everyone involved, Hoskins recalls. But there was no guarantee the deal would be completed. In addition to all the normal commercial considerations, the transac-tion would require approval by Investment Canada and the Competition Bureau.

Investment Canada is charged to en-sure major foreign investments provide “net benefit” to Canada. And though there is no official definition of what constitutes net benefit, Hoskins says, there seemed little doubt that bringing an “incredibly well-capitalized part-ner” to the Long Lake project was in everyone’s best interests.

It was the first transaction in which a Chinese company proposed to take a controlling interest in a Canadian energy company. But the end result would give CNOOC only a 35 per cent interest in Long Lake, conferring no operational control of the project.

The Competition Bureau was an en-tirely different matter. Its mandate is to protect against market control by any individual or group. Though CNOOC had previously invested several billion dollars in the Canadian energy sector, the amount was hardly enough to cause concern on its own. But CNOOC is owned by the Chinese government, which is also the only shareholder in the China Petroleum Company (Sino-pec) and PetroChina — and the three companies together held investments

in the Canadian oil patch worth tens of billions.

“That, theoretically, could have been a competitive is-sue,” Hoskins says. So, while the Competition Bureau mulled it all over, his M&A group proceeded with docu-menting the proposed acqui-sition, and the Norton Rose insolvency team continued to work with bondholders on the alternative recapitaliza-tion plan, just in case the ac-quisition went pair shaped.

“It was very labour in-tensive on the legal side,” Hoskins observes. In addition to the two teams of Norton Rose lawyers, bondholders were represented by Bennett

Jones, CNOOC had Gowlings, as well as in-house lawyers from Beijing and OPTI’s board of directors was sepa-rately represented by Miller Thomson.

“It continued on longer than anybody had ever really thought it would” but the Competition Bureau eventually ac-ceded and Hoskins says “it’s now gen-erally acknowledged that they (Chi-nese energy companies) do compete.” Though he says he knows of no case where any of the three Chinese energy giants have bid against each other on a Canadian acquisition.

The acquiescence of Investment Canada and the Competition Bureau in the OPTI deal was a good omen for Kousinioris four months later when Bennett Jones’ client, Sinopec, proposed a $2.2-billion acquisition of Daylight Energy Ltd.

Daylight was a company with a large land position and production of 38,000 barrels of oil equivalents per day in Al-berta and British Columbia. It was the first time a Chinese company had proposed an outright takeover of an operating energy company in Canada. But Kousinioris says both government agencies ruled in time for the deal to close before year end.

“I think the authorities understand that these (Chinese energy giants) are inde-pendent commercial entities,” he says.

Kousinioris and Hoskins agree that, after quashing BHP Billiton’s proposed $40-billion hostile takeover of Sas-katoon-based Potash Corporation in 2010, Prime Minister Stephen Harper’s government is in no hurry to intervene in more M&A deals.

On the other hand, Hoskins says, it’s fairly clear that Ottawa is keeping its options open. After the Potash ruling, the government had promised to issue new guidance on foreign takeovers. But he notes that hasn’t happened, and he isn’t expecting Ottawa to make any statements that would tie its hands in the event of some future blockbuster deal.

Kousinioris says Canada has very few “national champions” the likes of Potash, that would warrant interven-tion. Such champions might include Air Canada or Bombardier but he says the oil and gas industry is too large and diverse for the acquisition of any one company to be likely to trigger pre-emptive action.

In fact, Bennett Jones may have played a role in devising a new model for big foreign takeovers, helping Swiss commodities trader Glencore with its $6.1 billion purchase of Viterra, formerly known as the Saskatchewan Wheat Pool. The deal, announced in March, still awaits a ruling by Invest-ment Canada. But even Saskatchewan Premier Brad Walls, who led opposi-tion to the Potash deal, was making conciliatory sounds after Glencore announced it would spin off $1.8 bil-lion of Viterra assets to Calgary-based Agrium and another $800 million to Richardson International of Winnipeg.

Calgary ‘punching above’ its business weight

GRIND FROM PAGE 1

Craig Hoskins

John Kousinioris

See TRENDS, Page 3

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Lou Cusano is a partner in Stikeman Elliott LLP’s Calgary office whose practice focuses on the areas of administrative, regulatory and environmental law and commercial litigation with an emphasis on matters pertaining to the energy sector. His experience extends to matters before and in relation to various regulatory tribunals, including the Alberta Utilities Commission, Alberta Energy Resources Conservation Board, British Columbia Utilities Commission, Alberta Environmental Appeal Board, Alberta Surface Rights Board, Alberta Securities Commission, National Energy Board and Federal Energy Regulatory Commission of the U.S.A. Between 2005 and 2010, Cusano was the managing partner of the firm’s Calgary office.

What attracted you to law?I’ll probably get ridiculed by my colleagues for this, but I always wanted to be a lawyer and To Kill a Mockingbird probably had a part in that. I also loved sports, but making a living doing that wasn’t in the cards, so law was my choice.

What was your first job?Like most boys of my generation, delivering newspapers was probably my first job. But I guess my first real job was on the railway doing rail-line maintenance, which meant pounding spikes and mending ties. It was a great job for a young guy, because I was outdoors, the money was good and it kept you fit. And by the time August rolled around, you wanted a pen back in your hand. That’s probably one of the reasons my father steered me that way.

What do you enjoy most about your job?The best part of my job is working with clients – interacting with them and coming up with solu-tions to their issues. A lot of the clients I work

with are seeking approval for projects, and they need to get around roadblocks to do that. At the end of the day, I’m helping them get their pipe-line or power plant built.

What is most challenging about your job?Probably the people are most challenging, but the challenge is in getting to know them.

How would you define professional success?At the end of the day in our profession, being a trusted adviser makes you successful – being called upon to advise clients about their most critical issues.

What are you passionate about?My kids. I have four children, and they really are the focus of my life – hanging out with them or coaching them.

What frustrates you?Pessimism. I am an incurable optimist, and I find pessimism and negativity very frustrating.

Whom do you admire?My mom and dad. They are the quintessential immigrant story. The came here in 1957 from Italy with nothing – not even a facility for the language. They were great parents who worked hard and all three of their boys went on to post-secondary. One of my brothers is an obstetrician and my other brother is a lawyer as well.

What does a great day off look like for you?If I wasn’t sitting on a beach in Maui, I would be playing sports with my kids.

— Shannon Sutherland

PROFILE: LOU CUSANO, STIKEMAN ELLIOT LLP

Canadian deals in foreign lands on rise

TRENDS FROM PAGE 2

Kousinioris says he sees three trends emerging from re-cent energy M&A transactions:

n There’s less emphasis on gaining control of operations and more interest in trading minority positions or doing joint ventures or partnerships that spread risks or simply bring needed cash to huge en-ergy developments;

n Technology is becoming more important and deal makers are interested in transactions that will provide access to know — how in areas such as steam- assisted gravity drainage (SAGD), horizontal drilling, multi-stage fracturing and other well stimulation techniques; and,

n The Canadian industry is becoming far more inter-national as American energy companies concentrate on their own emerging shale gas and shale oil plays, and more big Asian and European compa-nies come to Canada in search of major reserve additions.

Both lawyers say big foreign deals will tend to happen at an uneven pace, because each big transaction has it’s own logic. But, beyond the scale of Cana-dian energy reserves, there are several reasons to believe the flow of foreign cash will con-tinue. Asian countries will con-tinue to need assured supplies of commodities, including en-ergy, in their drive for economic parity with the West. Canada is one of a very few large energy-producing jurisdictions whose reserves are not controlled by a state-owned enterprise. Lack of export avenues and low Ca-nadian equity values both tend to make our reserves cheap. And Canada is a good place to acquire advanced technologies, especially in shale gas extrac-tion, where China’s resource potential exceeds that of Can-ada and the U.S. combined.

With foreign cash pouring into mergers and acquisitions in Canadian energy and other sectors, it’s easy to overlook the outbound flow of business, says Greg Turnbull of McCar-thy Tétrault’s Calgary office.

McCarthy’s has been front and centre in some big M&A transactions in recent months, including acting for Agrium Inc. in its $1.8-billion carve out from the $6.1-billion, three-way acquisi-tion of Viterra by Glencore of Switzer-land. They also acted for Research in Mo-tion when it bought $4.5 billion worth of Nortel technology patents.

But Turnbull says there’s a growing trend that’s seeing Canadian companies do-ing more deals in foreign lands.

McCarthy Tétrault just com-pleted a $600-million initial public offering on the Hong Kong Stock Exchange for Cal-gary-based Sunshine Oilsands Ltd., with proceeds dedicated to oilsands steam injection plans.

Motives for Sunshine listing first on the HKSE included a certain amount of “oilsands fatigue” among investors in Canada, where companies are aiming to raise

some $180 billion for doz-ens of projects over the next decade. There was also an interest in seeing if they could “get a different multiple” — a higher price per share — in the Chinese market, he says. A higher share price would, of course, become a big advan-tage when it comes time to list in Canada. But Turnbull says it’s too early to tell how that

will work out. Meanwhile, other

Canadian client companies are be-coming increasingly aggressive at taking local energy tech-nologies into foreign countries. In Canada, horizontal drilling and multi-stage frac-

turing have opened up tens of billions of barrels of new reserves in formations, such as the Cardium, that were previ-ously considered to have been depleted. The same technolo-gies are opening vast shale oil and shale gas plays once deemed uneconomic. Based on success at home, several Canadian companies are now looking to test the same tech-nologies, as well as heavy oil expertise, in promising areas in Europe and around the world, Turnbull says.

Greg Turnbull

— Calgary Herald ArchiveAgrium was recently involved in the acquisition of Viterra by Glencore of Switzerland.

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Perhaps most importantly, Bradley says, pen-sion funds and hedge funds have grown larger and more able to take significant positions in Canadian companies. When companies fail to meet performance targets, these large investors are increasingly inclined to push for solutions.

“Shareholders are getting more active and they’re simply not willing to sit on the side-lines,” Bradley says.

Telus Corp. of Vancouver recently had its own dust-up with a U.S. hedge fund when Mason Capital announced its opposition to the company’s plans to eliminate non-voting shares by exchanging them for voting shares on a one-for-one basis. Mason says the plan would provide an unjustified premium to hold-ers of non-voting shares, while Telus says the one-for-one exchange plan was part of long-standing company documentation.

Bradley says U.S. hedge funds make a practice of targeting underperforming com-panies in solid industries for forcible, fast and, hopefully, profitable reorganization. In other situations, such as Telus, they seek to profit from share pricing issues. And they seem to be finding Canada an attractive hunt-ing ground. This is, in part, because leading companies here are generally smaller than in the U.S. and it takes less investment to gain a foothold they can use to force change, Brad-ley says. But she notes that huge Canadian pension funds have supported some U.S. funds in their actions and have been prime movers in remaking several Canadian com-panies —in the case of the Ontario Teachers Pension Plan, reshaping the entire Canadian coal industry.

So far, Bradley notes, there have been very few proxy skirmishes in the oil and gas sector, and she says there may be several reasons for this. Start-up oil and gas companies tend to be tightly held by company founders, executives and close supporters, making proxy fights pointless. Companies also tend to have short lifecycles, due to constant mergers and acquisi-tions. Moreover, she says, there are some 960 oil companies registered in the city and it’s easier for unhappy shareholders to sell their positions and invest elsewhere, “voting with their feet” instead of fighting a complicated proxy battle.

But she says all this may be due to change. Oilsands projects and well drilling in the hot new shale oil and shale gas plays are all be-

coming far more capital intensive. This, she says, is forcing companies to reach further afield for investment and making them far more susceptible to shareholder activism.

Walied Soliman and Orestes Pasparakis of Norton Rose handle proxy battles on a regular basis, acting at various times for either incumbent management or dissident shareholders.

Pasparakis says anyone who thinks the oil and gas industry will remain insulated from shareholder action should “stay tuned.”

Soliman adds, “A lot of our clients love fighting management and directors with that perspective.” He says shareholders no longer tolerate cosy relationships between company executives and directors who are supposed to be independent.

Soliman says proxy fights quickly become personal, and he contrasts this with takeover battles. While takeovers focus purely on what price will attract a majority of shares, he says proxy fights become very public contests to win the hearts and minds of shareholders.

“Each side is saying, ‘My (corporate) vision is better than that person’s vision.’”

Another deeply personal aspect of proxy battles is the inclination of some shareholders to challenge the pay packages of executives and directors, or what Pasparakis calls putting an end to “Christmas in July.” But, while a recent survey named 16 Canadian CEOs receiving annual compensation of more than $10 million, Huggesen Consulting of Toronto reported that in 2012 shareholders at every one of 71 Cana-dian companies that permitted “say-on-pay” votes approved pay packages with an average 94 per cent in favour.

Overall, Pasparakis and Soliman say, proxy fights are “healthy” for Canadian business be-cause they test the credibility of management and the expertise and independence of directors.

“Shareholders have always looked for bet-ter returns and better governance,” Pasparakis says. “But they now realize there is a tool avail-able to them.”

In this environment, Soliman says, direc-tors and management “need to be aware that if there is any opening or loophole … they will be attacked by shareholders and activists.” Ac-cordingly, there needs to be a “complete and fundamental change in the approach boards and management need to take” toward strategic or fiduciary issues.

Pasparakis says the two lawyers have pro-duced an “activist playbook” to aid companies in defending against proxy warriors. They agree with Bradley’s observation that the first steps in dealing with dissident actions are crucial.

PERFORMANCE FROM PAGE 1

Canadian law schools embrace challenges of 21st century

BY BARBARA BALfOUR

Training lawyers for the 21st century means preparing them for an

incredibly fast-changing envi-ronment.

Some of the latest offerings this fall at law schools range from mandatory experiential learning at the University of To-ronto’s Osgoode Law School to a dual degree program in energy law offered between the Univer-sity of Calgary and University of Houston.

“Law schools have to spend more time focusing on adding real value to the lives of students; they must place greater premium on skills education,” says Ian Hollo-way, dean of the U of C’s Faculty of Law. “When we say skills, we’re not just talking about skills of immediate value — preparing court papers or incorporating a company — but rather skills of enduring value that carry across

domains, like teamwork, project management, and leadership.

“Sociologists say students will have three or four careers over their working lives. If all we do is train them for their first career, I don’t think we’re giv-ing them enough value for their tuition dollar.”

This September, law students at the U of C will have the op-portunity to participate in the International Energy Lawyers Program, a four-year course that will enable them to graduate with degrees from the universi-ties of both Houston and Cal-gary, and a licence to practice in Canada and the U.S.

To make the program more accessible, Calgary students who undertake their studies at the University of Houston will be charged the same fees as lo-cal students.

They will have opportuni-ties for summer placements at energy companies, oil and gas

companies and law firms in both cities.

“That Houston-Calgary axis is the spinal cord of the North American energy industry,” says Holloway. “It made sense for us to have Houston as our partner, with its heavy focus on energy and resources and whose inter-ests and milieu reflect our own.

“This is a very forward-look-ing program, grounded in what’s likely to be one of the principal economic drivers in Canada in the foreseeable future. It will add another layer to students’ profes-sional education and make them far more versatile.”

At the University of Alberta’s Faculty of Law, celebrating its centennial this year, emphasis is placed on a broad-based legal education, with a compulsory curriculum that extends far be-yond what is required.

See STRONG CORE, Page 5

— Wil Andruschak photoIan Holloway, dean of the U of C’s Faculty of Law, says law schools must place a greater premium on skills education.

CALGARY LAW REVIEW 5

Shauna Crothers is an associate in McCarthy Tétrault LLP’s business law group in Calgary. She works closely with the financial services depart-ment, as well as maintaining a general corporate practice. She received her bachelor of science in kinesiology with great distinction from the University of Saskatchewan in 2003, and bachelor of laws degree from the University of Saskatchewan in 2009. Crothers joined the firm in 2009 and was called to the Alberta bar in 2010. She is a member of the Calgary Bar Association, Canadian Bar Association and Law Society of Alberta.

How would you describe yourself?I would describe myself as friendly, a perfec-tionist, hard working and honest.

What was your first job? I grew up in a very small town called Tompkins, Sask., with a population of approximately 150 people. There was not much to do in summer but take swimming lesson at the neighbouring town of Gull Lake. That resulted in me life-guarding at age 15.

What was it that attracted you to the field of law? To business law? I received a kinesiology degree, and in my initial years in kinesiology I had planned on becoming a physiotherapist specializing in the rehabilitation of athletes. I had the oppor-tunity to work with CIS (Canadian Interuni-versity Sport) athletes at the physiotherapy clinic at the University of Saskatchewan. It was an amazing experience, although I soon realized I wanted a career that I found more challenging day to day. Law requires contin-ual learning and is an extremely challenging profession in my view — especially business law where there is ample opportunity to work on cutting-edge files and to chart new terri-tory.

What’s the best part of your job? The opportunity it provides to meet interesting and intelligent people. In any given transaction, you can be dealing with experts in various areas of law or business and in various jurisdictions around the world.

What’s the most challenging aspect of your job?I am a fairly junior lawyer, and I find it can be overwhelming at times to be given tasks that are novel, in a short time period. That said, it is a great learning experi-ence and there is always support available when needed.

How do you define professional success? I define it as the ability to offer

precise legal advice efficiently and have a posi-tive professional relationship and reputation with clients and the legal community.

In your opinion, what makes a “good” lawyer? In my view, it is a combination of being ethical, knowing the area of law that you practice and having the ability to effectively communicate with colleagues, clients and counsel.

What did you look for in firm? I look for the ability of a firm to obtain interest-ing work and a firm that can also offer a positive and collegial environment in which to work.

What are you most passionate about? I am most passionate about my family, and I have always loved sports — watching and play-ing; hence my wanting to become physiothera-pist specializing in the rehabilitation of athletes.

Whom do you admire? Georges St. Pierre (French Canadian mixed martial artist). I admire that he is always striv-ing to be better even though he is the best — in his division and I would argue pound-for-pound. He is so humble despite his immense success, and he is one of the most disciplined people I can think of.

What frustrates you? The gym — I cannot lift as much or run as long or as hard as I used to.

What does a great day off look like for you? I would be sitting on a patio with friends and/or family enjoying a sunny day and a glass of wine.

— Shannon Sutherland

PROFILE: SHAUNA CROTHERS, Mc CARTHY TéTRAULT LLP

“We want to create opportu-nities for people to serve cli-ents in a broad range of career settings, from national and international firms to govern-ment service and private prac-tice. The best way to do that is to provide a strong core,” says dean Philip Bryden.

In September 2013, the U of A’s law faculty will host an international conference on the future of law schools. Intended for both a profes-sional and academic audience, conference topics will address issues such as what the legal profession will look like in the future and how that will influ-ence the kinds of legal educa-tion that should be provided.

“We’ll use it as a spring-board to energize internal discussions as well as across Canada and the U.S.,” says Bryden. “There are more at-tempts at differentiation in education between institutions in the U.S., but in Canada, all law schools are reasonably full-service. Will that persist, or will our schools start to dif-ferentiate more radically?”

This fall, Osgoode Law School at the University of Toronto will be the first school in the country to add an expe-riential learning component, mandatory for every student.

“Every student has a chance to learn by doing — we see it as something you can’t have received a full legal education without,” says Osgoode dean Lorne Sossin.

“We’re also opening the first office of experiential education in the country, where new inten-sive programs and collabora-tions with community partners will be built. This is not just a set of disparate courses. We’re do-ing this because when students see the practical applications of

the legal knowledge they have obtained, they are much better able to excel. When we talk to alumni, invariably the best memories they have are of the clinics they’ve attended and experiences they got to be part of first hand.”

While not mandatory, expe-riential learning placements are also a big part of the curriculum at Dalhousie University’s Schulich School of Law, which boasts the highest pro bono participation rate in the country.

“This builds on the tradition of unselfish public service started up by the first dean of the law school, Richard Weldon,” says assistant dean Sarah Kirby. “We were also singled out by Corporate Knights in 2011 for best practices in student initia-tives. This shows our students are not just book smart, but are also forging connections outside the law school in meaningful work. And this continues when they leave.

“Employers really value that because lawyers always need to bring in new busi-ness. The way they raise their profiles early in their career and maintain them as they

progress is through commu-nity involvement and engage-ment – this gives the firm a good name, and is also a way for clients to get to know and respect you.”

In addition to undertaking extensive curriculum reform, including revamping legal research and writing courses currently on offer, Canada’s first law school is also dedi-cated to identifying and creat-ing career opportunities in diverse markets.

“We push for students to cast their nets wide when looking for opportunities,” says Kirby. “Even in this mar-ket, our students have great placement rates.”

The successful law schools of the future will demonstrate the same traits that have helped law firms prosper through challenging times, says Holloway.

“It’s a willingness to embrace the spirit of entrepreneurship, to look forward, and to acknowl-edge the relationship of sym-biosis between the academy and profession,” he says.

“And there are wonderful opportunities for Canadian law schools to embrace that.”

STRONG CORE FROM PAGE 4

— Wil Andruschak photoThe University of Calgary, above, and the University of Houston will launch a dual degree in energy law this fall.

Not only in Canada, but virtually everywhere around the globe. With close to 700 lawyers in sevenoffices, we help drive the success of our clients – and that means going the extra kilometre.

2900 lawyers | 43 offices | 6 continents | 1 vision

nortonrose.com

Wego the extra kilometre

CALGARY LAW REVIEW6

George Wowk practices in technology, intellectual prop-erty, privacy and franchise law at Burnet, Duckworth and Palmer LLP. Before becoming a lawyer, he was a software engineer for a Fortune 100 computer software company. Wowk is a father of four who loves spending time with his family and capturing their adventures through photography.

What was your first job?Paper boy and then bus boy.

What was it that attracted you to the field of law? To your area of specialization?I was originally a software programmer at IBM, and I was looking for something that involved more interaction with people. I also wanted to go back to school. I was in the process of mak-ing a decision when I happened to find a copy of The Lawyers Weekly on an empty seat in the back of a bus in Toronto and I said to myself, ‘That might be interesting.’ So here we are. My area of specialization is technology law. My background at IBM is obviously helpful in working with technology clients.

What’s the best part of your job?The one thing about technology law is there is so much variety. I get to work with many differ-ent types of businesses. As well, there is no end to the different types of issues and transactions that come up.

What’s the most challenging part of your job?The demands on my personal time are most challenging. I have a young family, so in order to spend time with them during the week, I am often in the office at 5 a.m. On many weekends, I will also need to be in the office.

In your opinion, what makes a “good” lawyer?I am a transactional lawyer, which means helping clients with their various transac-tions – this can include a purchase and sale of technology or a business, a licence to technol-ogy or a research and development contract. In transactional work, most clients are looking for a facilitator. Therefore, in my line of work, a good lawyer is one who is a facilitator. This means advising their client of the various terms and conditions as well as the various risks, and letting their client make an informed decision based on the advice and then following the cli-ent’s instructions. Two good lawyers on either side of a transaction should be able to work together to facilitate it while at the same time looking after their separate client’s interests. A good lawyer will also be a good negotiator and drafter, and will have good legal knowledge and knowledge of his or her client’s industry.

What are you most passionate about?Professionally, I am passionate about providing exceptional legal services. Personally, its being a good dad and husband.

Whom do you admire?Professionally, I admire Alison Youngman. She was a lawyer out of Toronto that was on the other side of a transaction. I had the pleasure of working with her on a transaction early in my career and I have to say she was one of the largest influences on how I practice today. Personally, I admire my wife. Within an hour of meeting her I knew that I was going to — or, rather, I was going to try my darnedest to – spend the rest of my life with her.

— Shannon Sutherland

PROFILE: GEORGE WOWK, Burnett Duckworth Palmer llp

BY MARIA CANTON

Newly minted Alberta Premier Alison Red-ford is one. So is her

now-former leadership rival Gary Mar.

Not to mention Peter Lougheed, Laurence Decore, Pierre Trudeau, John Turner, Brian Mul-roney, Kim Camp-bell, Jean Chretien, Paul Martin — and the list goes on.

The connection between the legal world and political realm, however, is nothing new, nor is it a mystery.

The two careers, experts say, are a natural match.

“I think going to law school is part of the seasoning, if you will, that goes along with becoming a politician,” says Ian Holloway, dean of the Faculty of Law at the University of Calgary.

“Of course, you have to have political inspirations and in-stincts, but studying law is considered to be a natural stepping stone towards a ca-reer in politics.”

According to Holloway, who is new to the U of C and the longest-serving university law dean in the country, both lawyers and politicians are constantly tasked with the art of rooting out the subtleties of highly complex issues.

“Skillfully dealing with complex issues isn’t something you can learn just by reading a

book. You have to know how to poke and prod and pick at an issue to get to the root of it, and that is something that law school teaches students – how to really get to the heart of an is-sue, how to read the subtleties,” Holloway adds.

There are, of course, other obvious similari-ties between the two. Lawyers study the law, politicians make the law, thereby giving lawyers-cum-politicians a greater understanding of how the system works.

Lawyers tend to be charismatic and persuasive debaters, a necessary skill when it comes to convincing a judge or jury that their arguments are more worthy than their peers.

Similarly, politicians tend to be dynamic individuals with a knack for debating and building public con-fidence in their ideas and philosophies.

The ability to envi-sion an idea and articu-late it to the point that members of the general public start to believe in it too is key to suc-cess in politics. “The ability to read a

situation on a more global level, interpret it and apply it locally so that people believe in it and subscribe to it is a great skill that both lawyers and politicians tend to possess,” says Holloway.

While there are many great examples of lawyers who turn to politics and then back to law, former Liberal senator Dan Hays tends to agree law-yers do succeed in politics.

Hays is the former chairman of MacLeod Dixon — a promi-nent Calgary firm that joined forces with the Norton Rose Group in January 2012. The son of Senator Harry Hays, Dan Hays joined MacLeod Dixon in 1965 and went on to chair its executive committee until Prime Minister Pierre Trudeau appointed him to the Senate in 1984.

“Lawyers and politicians tend to have broad experience and are exposed to a wide variety of issues — good lawyers and good politicians are able to see what people are concerned with at particular times,” says Hays.

“Politicians who are good at what they do can sense where people and the country need to go and can lead peo-ple. Similarly, good lawyers possess strong leadership skills. The practice of law ranges from one end of the spectrum to the other, much like politics.”

Hays says lawyers who return to practicing law after a political career can be of great benefit to a firm just by virtue of their political success.

“They can bring a lot of prominence, primarily if they held a high role in office, and that extends to bureaucrats, diplomats and former gover-nors too,” he says.

“Politicians returning to law have spent years making the laws, they have a solid understanding of why laws were shaped the way they were, they have extensive contacts and connections, and they act as mentors and leaders.”

Fifteen of the country’s last 22 prime ministers have been lawyers.

Politics and lawa natural mix

Alison Redford

Peter Lougheed

Ian Holloway