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

LAW REVIEW a special publication on business law by the calgary herald

www.calgaryherald.com/business/lawreview

June 22, 2012

Road warrior The

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

Proxy battles: the rise of shareholder activism

INTERVIEW BY BRIAN BURTON PHOTOS BY WIL ANDRUSCHAK

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algary 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 mountaineer, 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 warriors with the Calgary office of Norton Rose (formerly Macleod Dixon), he reckons lawyering, cycling and climbing 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 lectures 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 married 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.

INSIDE:

by brian burton

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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.

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 Master’s (of Law) at the London School of Economics. And then, when we were in London, we canoed down the Amazon, we travelled across Egypt — in fact, I think our first Christmas as husband and wife, we went riding horses around the pyramids. You know, Macleod Dixon was very supportive, but I knew that once a family 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 looking 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 sabbatical 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. government looking at Afghanistan and saying, ‘What can we do to help stabilize 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 environmental issues — a regulatory regime that works and a fiscal regime that works — and those that don’t.

t was like a tsunami in slow motion. 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 Railway were swept from office in a sudden capitulation just hours before the company’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 voting rights owned by like-minded shareholders to force change on an unwilling company — have become increasingly common in Canada. Statistics kept by Kingsdale Shareholder 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 largest so far. Now, lawyers who act for both incumbent management and dissident shareholders in these battles say the wave of shareholder activism is Noralee Bradley likely to make a bigger impact in Canada’s second largest head-office city in coming years. “I’ve lived it in full colour,” Noralee Bradley says of the rise in proxy battles. A partner with Osler, Hoskin & Harcourt, her most recent proxy fight involved acting for dissident shareholders 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. Shareholder impatience has also been fired by the recent downturn in stock markets worldwide, as well as by greater public access to information on rising 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 company 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 formal dissident proxy circular; and, n a dissident can now privately solicit proxies from up to 15 shareholders before going public with a proxy circular.

See GRIND, Page 2

See PERFORMANCE, Page 4

Calgary at the core of global energy deals

law schools rise to challenge of training lawyers

Law and politics – a natural match say experts

calgary lawyers share passion for career

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Calgary ‘punching above’ its business weight

It was the first transaction in which a Chinese company proposed to take s a city of only one million a controlling interest in a Canadian people, Calgary is “punching energy company. But the end result way above its weight” in inter- would give CNOOC only a 35 per cent national business circles, says mergers interest in Long Lake, conferring no and acquisitions lawyer Craig Hoskins operational control of the project. of Norton Rose. The Competition Bureau was an en“Calgary is a real core part of what’s tirely different matter. Its mandate is to happening globally in the energy secprotect against market control by any tor,” Hoskins says. individual or group. Though CNOOC The “sheer scale” of Canadian enhad previously invested several billion ergy resources is the most important dollars in the Canadian energy sector, of several factors attracting tens of bilthe amount was hardly enough to cause lions of dollars in foreign investment concern on its own. But CNOOC is through a fairly constant stream of owned by the Chinese government, transactions, he says. “Asian countries which is also the only shareholder in are looking for long-term supply and the China Petroleum Company (Sinowe’re as big as it gets.” pec) and PetroChina — and the three The resulting infusion of foreign companies together held investments cash is, of course, supplein the Canadian oil patch mented by billions of dollars worth tens of billions. worth of domestic deal-making. “That, theoretically, could And each deal, foreign or have been a competitive isdomestic, adds to the millions sue,” Hoskins says. So, while in fees earned by the Calgary the Competition Bureau law firms who put those deals mulled it all over, his M&A together. group proceeded with docuThe Bloomberg business menting the proposed acquinews agency says investment Craig Hoskins sition, and the Norton Rose in the Canadian oil patch by insolvency team continued Chinese companies alone is to work with bondholders on approaching $30 billion over the alternative recapitalizathe past five years. Other big tion plan, just in case the acspenders come from Malaysia, quisition went pair shaped. India, South Korea, Thailand, “It was very labour inNorway and France. The tensive on the legal side,” French oil giant, Total, reHoskins observes. In addition cently partnered with Calgaryto the two teams of Norton based Suncor to advance three John Kousinioris Rose lawyers, bondholders oilsands joint-venture projects were represented by Bennett very conservatively estimated to cost Jones, CNOOC had Gowlings, as well $20 billion over the next decade. as in-house lawyers from Beijing and John Kousinioris, M&A leader with OPTI’s board of directors was sepathe Calgary-based law firm Bennett rately represented by Miller Thomson. Jones, says oil and gas activity made “It continued on longer than anybody up half of the $135.5 billion in acquisihad ever really thought it would” but tions in Canada in 2009, but declined the Competition Bureau eventually acto 20 per cent of the $168 billion worth ceded and Hoskins says “it’s now genof deals done last year. Low natural gas erally acknowledged that they (Chiprices turned 2011 into a wait-and-see nese energy companies) do compete.” year for domestic deals, Kousinioris Though he says he knows of no case says. But it’s now clear that gas prices where any of the three Chinese energy are staying low and this may put presgiants have bid against each other on a sure on some gas-weighted domestic Canadian acquisition. companies to complete contemplated The acquiescence of Investment mergers. And low gas prices may also Canada and the Competition Bureau be a magnet for foreign acquisitions. in the OPTI deal was a good omen On the other side of the coin, high oil for Kousinioris four months later prices could also trigger deals because when Bennett Jones’ client, Sinopec, Canadian share valuations are low, proposed a $2.2-billion acquisition of relative to the value of reserves held by Daylight Energy Ltd. many companies. Daylight was a company with a large He expects domestic deals will tend land position and production of 38,000 to be done in shares, especially by gasbarrels of oil equivalents per day in Alweighted companies that are mostly berta and British Columbia. It was the first short on cash, while state-owned fortime a Chinese company had proposed an eign companies will continue to pump outright takeover of an operating energy cash into the Canadian energy sector. company in Canada. But Kousinioris says Hoskins and Kousinioris have been both government agencies ruled in time inside players in some of the biggest, for the deal to close before year end. most complex and important deals in the “I think the authorities understand that past year. these (Chinese energy giants) are indeThe $2.2-billion acquisition of OPTI pendent commercial entities,” he says. Canada by the Chinese National OffKousinioris and Hoskins agree that, shore Oil Company (CNOOC) in July after quashing BHP Billiton’s proposed 2011 undoubtedly ranks among the $40-billion hostile takeover of Sasmost complex deals in some time, says katoon-based Potash Corporation in Hoskins, who represented OPTI. 2010, Prime Minister Stephen Harper’s Borrowing a phrase from one of his government is in no hurry to intervene Norton Rose colleagues, Hoskins says in more M&A deals. financially troubled OPTI had “boiled On the other hand, Hoskins says, it’s the oceans” looking for a buyer, with no fairly clear that Ottawa is keeping its success. OPTI owned 35 per cent of the options open. After the Potash ruling, Long Lake oilsands steam injection and the government had promised to issue upgrading project in partnership with new guidance on foreign takeovers. project operator Nexen Inc. But Long But he notes that hasn’t happened, and Lake production was slow to ramp up he isn’t expecting Ottawa to make any and OPTI was starved for cash. statements that would tie its hands in the Finding no buyer, OPTI was proevent of some future blockbuster deal. ceeding to negotiate with its bondholdKousinioris says Canada has very ers on a deal that would have acknowlfew “national champions” the likes of edged the destruction of shareholder Potash, that would warrant intervenequity and recapitalized the company tion. Such champions might include with new infusions of cash from bondAir Canada or Bombardier but he says holders. After intensive negotiations the oil and gas industry is too large and Norton Rose, OPTI and its bondholddiverse for the acquisition of any one ers were proceeding down the road to company to be likely to trigger prerecapitalization when CNOOC arrived emptive action. on the scene with an offer to purchase In fact, Bennett Jones may have the struggling company. played a role in devising a new model The CNOOC offer was better for for big foreign takeovers, helping everyone involved, Hoskins recalls. But Swiss commodities trader Glencore there was no guarantee the deal would be with its $6.1 billion purchase of Viterra, completed. In addition to all the normal formerly known as the Saskatchewan commercial considerations, the transacWheat Pool. The deal, announced in tion would require approval by Investment March, still awaits a ruling by InvestCanada and the Competition Bureau. ment Canada. But even Saskatchewan Investment Canada is charged to enPremier Brad Walls, who led opposisure major foreign investments provide tion to the Potash deal, was making “net benefit” to Canada. And though conciliatory sounds after Glencore there is no official definition of what announced it would spin off $1.8 bilconstitutes net benefit, Hoskins says, lion of Viterra assets to Calgary-based there seemed little doubt that bringing Agrium and another $800 million to an “incredibly well-capitalized partRichardson International of Winnipeg. ner” to the Long Lake project was in See TRENDS, Page 3 everyone’s best interests. by brian burton

A GRIND from page 1 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-toone 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 opportunities 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, governments 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 proceed? I would recommend they understand 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 following you as you move from the airport to the base. And that’s not everybody’s comfort zone. Yemen, for example: very prospective, but very challenging. Afghanistan: maybe less prospective 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 commitment and the huge grind? You have to have an understanding spouse — there’s no doubt. Your wife or husband has to be comfortable 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 country 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 Blackberry. It’s the middle of the night in Dubai and she’s getting ready for her exam. So you have to be committed. 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 interesting 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 becoming 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 Calgary. They’re doing the deals here. The shift is huge and it’s really 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 security 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 upwards of $10 to $14 an mcf (thousand cubic feet) and looking at gas here (North America) at $2. There’s a huge advantage if they can produce 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. Otherwise, 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, environmentally. 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.

CALGARY LAW REVIEW Calgary Law Review is a special publication of the Calgary Herald Special Projects Manager/Editor: Barb Livingstone, 403-235-7339, [email protected] Co-ordinator: Jennifer Worley Advertising Account Executives for Calgary Law Review: James Pearce, 403-235-7202; Susan Walker, 403-235-8784

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CALGARY LAW REVIEW TRENDS from page 2 Kousinioris says he sees three trends emerging from recent 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 energy 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 steamassisted gravity drainage (SAGD), horizontal drilling, multi-stage fracturing and other well stimulation techniques; and, n The Canadian industry is becoming far more international as American energy companies concentrate on their own emerging shale gas and shale oil plays, and more big Asian and European companies 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 Canadian energy reserves, there are several reasons to believe the flow of foreign cash will continue. Asian countries will continue to need assured supplies of commodities, including energy, in their drive for economic parity with the West. Canada is one of a very few large energyproducing jurisdictions whose reserves are not controlled by a state-owned enterprise. Lack of export avenues and low Canadian equity values both tend to make our reserves cheap. And Canada is a good place to acquire advanced technologies, especially in shale gas extraction, where China’s resource potential exceeds that of Canada and the U.S. combined.

PROFILE: LOU CUSANO, STIKEMAN ELLIOT LLP

— Calgary Herald Archive

Agrium was recently involved in the acquisition of Viterra by Glencore of Switzerland.

Canadian deals in foreign lands on rise

With foreign cash pouring some $180 billion for dozinto mergers and acquisitions ens of projects over the next in Canadian energy and other decade. There was also an sectors, it’s easy to overlook interest in seeing if they could the outbound flow of business, “get a different multiple” — a says Greg Turnbull of McCarhigher price per share — in thy Tétrault’s Calgary office. the Chinese market, he says. McCarthy’s has been front A higher share price would, of and centre in some big M&A course, become a big advantransactions in recent months, tage when it comes time to list including acting for Agrium in Canada. But Turnbull says Inc. in its $1.8-billion carve out it’s too early to tell how that from the $6.1-billion, will work out. three-way acquisiMeanwhile, other tion of Viterra by Canadian client Glencore of Switzercompanies are beland. They also acted coming increasingly for Research in Moaggressive at taking tion when it bought local energy tech$4.5 billion worth of nologies into foreign Nortel technology countries. In Canada, Greg Turnbull patents. horizontal drilling But Turnbull says and multi-stage fracthere’s a growing trend that’s turing have opened up tens seeing Canadian companies do- of billions of barrels of new ing more deals in foreign lands. reserves in formations, such as McCarthy Tétrault just comthe Cardium, that were previpleted a $600-million initial ously considered to have been public offering on the Hong depleted. The same technoloKong Stock Exchange for Calgies are opening vast shale gary-based Sunshine Oilsands oil and shale gas plays once Ltd., with proceeds dedicated to deemed uneconomic. Based oilsands steam injection plans. on success at home, several Motives for Sunshine Canadian companies are now listing first on the HKSE looking to test the same techincluded a certain amount nologies, as well as heavy oil of “oilsands fatigue” among expertise, in promising areas investors in Canada, where in Europe and around the companies are aiming to raise world, Turnbull says.

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.

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 pipeline or power plant built.

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 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 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 solutions to their issues. A lot of the clients I work

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 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 postsecondary. 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

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4 CALGARY LAW REVIEW performance from page 1 Perhaps most importantly, Bradley says, pension 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 sidelines,” 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 holders of non-voting shares, while Telus says the one-for-one exchange plan was part of longstanding company documentation. Bradley says U.S. hedge funds make a practice of targeting underperforming companies 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 hunting 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, Bradley 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 companies —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 acquisitions. 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 Canadian 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 because they test the credibility of management and the expertise and independence of directors. “Shareholders have always looked for better returns and better governance,” Pasparakis says. “But they now realize there is a tool available to them.” In this environment, Soliman says, directors and management “need to be aware that if there is any opening or loophole … they will be attacked by shareholders and activists.” Accordingly, 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 produced 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.

— Wil Andruschak photo

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

Canadian law schools embrace challenges of 21st century by Barbara Balfour

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raining lawyers for the 21st century means preparing them for an incredibly fast-changing environment. Some of the latest offerings this fall at law schools range from mandatory experiential learning at the University of Toronto’s Osgoode Law School to a dual degree program in energy law offered between the University 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 Holloway, 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 giving them enough value for their tuition dollar.” This September, law students at the U of C will have the opportunity to participate in the International Energy Lawyers Program, a four-year course that will enable them to graduate with degrees from the universities of both Houston and Calgary, 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 local students. They will have opportunities 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 interests and milieu reflect our own. “This is a very forward-looking 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’ professional 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 beyond what is required. See STRONG CORE, Page 5

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CALGARY LAW REVIEW STRONG CORE from page 4 “We want to create opportunities for people to serve clients in a broad range of career settings, from national and international firms to government service and private practice. 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 professional and academic audience, conference topics will address issues such as what the legal profession will look like in the future and how that will influence the kinds of legal education that should be provided. “We’ll use it as a springboard to energize internal discussions as well as across Canada and the U.S.,” says Bryden. “There are more attempts 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 differentiate more radically?” This fall, Osgoode Law School at the University of Toronto will be the first school in the country to add an experiential 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 intensive programs and collaborations with community partners will be built. This is not just a set of disparate courses. We’re doing 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, experiential 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 initiatives. 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 business. The way they raise their profiles early in their career and maintain them as they

progress is through community involvement and engagement – 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 dedicated to identifying and creating career opportunities in diverse markets. “We push for students to cast their nets wide when looking for opportunities,” says Kirby. “Even in this market, 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 acknowledge the relationship of symbiosis between the academy and profession,” he says. “And there are wonderful opportunities for Canadian law schools to embrace that.”

— Wil Andruschak photo

The University of Calgary, above, and the University of Houston will launch a dual degree in energy law this fall.

PROFILE: SHAUNA CROTHERS, Mc CARTHY TéTrault LLP Shauna Crothers is an associate in McCarthy Tétrault LLP’s business law group in Calgary. She works closely with the financial services department, 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 perfectionist, 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 lifeguarding 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 opportunity to work with CIS (Canadian Interuniversity 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 continual 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 territory. 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 experience 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 positive 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 interesting 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 playing; hence my wanting to become physiotherapist specializing in the rehabilitation of athletes. Whom do you admire? Georges St. Pierre (French Canadian mixed martial artist). I admire that he is always striving to be better even though he is the best — in his division and I would argue pound-forpound. 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

6 CALGARY LAW REVIEW Politics and law a natural mix

book. You have to know how to poke and prod and pick at ewly minted Alberta an issue to get to the root of it, Premier Alison Redand that is something that law ford is one. So is her school teaches students – how now-former leadership rival to really get to the heart of an isGary Mar. sue, how to read the subtleties,” Not to mention Peter Holloway adds. Lougheed, Laurence Decore, There are, of course, other Pierre Trudeau, John obvious similariTurner, Brian Multies between the two. roney, Kim CampLawyers study the law, bell, Jean Chretien, politicians make the law, Paul Martin — and thereby giving lawyersthe list goes on. cum-politicians a greater The connection understanding of how between the legal the system works. world and political Lawyers tend to realm, however, is be charismatic and Alison Redford nothing new, nor is it persuasive debaters, a a mystery. necessary skill when it The two careers, comes to convincing a experts say, are a judge or jury that their natural match. arguments are more “I think going to worthy than their peers. law school is part of Similarly, politicians the seasoning, if you tend to be dynamic will, that goes along individuals with a with becoming a knack for debating and Peter Lougheed politician,” says Ian building public conHolloway, dean of the fidence in their ideas Faculty of Law at the and philosophies. University of Calgary. The ability to envi“Of course, you sion an idea and articuhave to have political late it to the point that inspirations and inmembers of the general stincts, but studying public start to believe law is considered to in it too is key to sucbe a natural stepping cess in politics. Ian Holloway stone towards a ca“The ability to read a reer in politics.” situation on a more global According to Holloway, level, interpret it and apply it who is new to the U of C and locally so that people believe in it the longest-serving university and subscribe to it is a great skill law dean in the country, both that both lawyers and politicians lawyers and politicians are tend to possess,” says Holloway. constantly tasked with the art While there are many great of rooting out the subtleties of examples of lawyers who turn highly complex issues. to politics and then back to “Skillfully dealing with law, former Liberal senator complex issues isn’t something Dan Hays tends to agree lawyou can learn just by reading a yers do succeed in politics. by MARIA CANTON

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Hays is the former chairman of MacLeod Dixon — a prominent 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 people. 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 governors 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.

PROFILE: GEORGE WOWK, Burnett Duckworth Palmer llp

George Wowk practices in technology, intellectual property, 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 making 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 different 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 transactions – this can include a purchase and sale of technology or a business, a licence to technology 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 client’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

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