Fasken Martineau DuMoulin LLP has recruited a top technology lawyer from rival Blake, Cassels & Graydon LLP, a move that reflects the country’s largest law firms’ push to win more business from startup companies.
Fasken hired Marc Shewchun, a lawyer who has also been an executive at several successful tech businesses prior to his six years at Blakes. Mr. Shewchun joins one of the country’s largest teams of dedicated tech lawyers as a Toronto-based partner in its emerging technologies group.
At Blakes, Mr. Shewchun launched a program called Nitro that tailored traditionally expensive legal advice in areas such as finance, intellectual property, and mergers and acquisitions into packages that fit the limited resources of startups. Fasken partner Will Shaw – co-head of the firm’s emerging tech group – said his firm’s strategy also places a priority on building ties to early-stage companies, in part because entrepreneurs tend to be extremely loyal to advisers who helped them get off the ground, and these companies can scale up quickly.
“Early-stage companies have an enormous need for the services offered by big law, and firms like Fasken are being thoughtful in figuring out how to deliver those services,” Mr. Shewchun said in an interview. “As someone who worked at startups, I understand the reality of building a business with a limited budget for legal services.”
Fasken has approximately 85 professionals in its emerging technology group, and 13 lawyers have joined the team since last May. The firm is home to over 900 lawyers and ranks as one of the dominant legal advisers to the tech sector, along with law firm Osler, Hoskin & Harcourt LLP, which also targets startups. Blakes has 17 lawyers on its Nitro team.
Blakes partner Christopher Jones said in an e-mail that the firm congratulates Mr. Shewchun on his new position and is delighted he found a new home.
Mr. Shewchun served as general counsel or an executive at several tech companies that grew from startups into industry leaders, including Wattpad Corp. and Points.com Inc. South Korean internet company Naver Corp. acquired Wattpad two years ago for US$600-million, while Montreal-based Plusgrade Parent LP bought Points.com last year for US$325-million.
“Marc brings a wealth of knowledge on the innovation economy, and will complement the services Fasken delivers to the tech sector,” Mr. Shaw said in an interview. Mr. Shewchun earned a graduate degree in aeronautics at the Massachusetts Institute of Technology prior to becoming a lawyer.
Large law firms such as Fasken customize their services to startups by being transparent on fees, balancing work between partners and lower-cost associates, setting priorities on expensive services such as registering patents – working on two or three key patents, rather than 20 or 30 projects – and staggering payment of bills to match rounds of fundraising from backers such as venture capital funds, according to Mr. Shaw and Mr. Shewchun.
In Canadian tech, if you’re not in Toronto, you’re invisible – that needs to change
“Emerging tech is a vibrant sector, with creative people generating new ideas. Our job as lawyers is to help clients protect their ideas and grow successful companies,” Martin Denyes, Fasken’s managing partner for Ontario, said in a press release. “Marc will play a key role in the continuing expansion of our national emerging tech group.”
Fasken is hiring at a time when the domestic tech industry faces significant headwinds, including a moribund market for initial public offerings, which are a common source of cash for companies trying to scale up their operations and a lucrative business for law firms.
The bulk of tech-sector activity, in financing and M&A, is taking place at smaller companies, according to data compiled by the Canadian Venture Capital Association (CVCA). Last year, 81 per cent of transactions were worth less than $20-million, and 38 per cent of deals were worth less than $5-million, according to the CVCA.
While IPOs were rare, overall investment in the domestic tech sector was robust in 2022, with CVCA data showing institutions and individual investors had $10-billion committed to companies in 706 deals. The number and value of deals done last year ranked second to only 2021, a record-breaking year for tech transactions.
Debt financings for startup companies also increased last year, with a record $664-million raised in 124 transactions, according to the CVCA. This activity took place before interest rates spiked and lender Silicon Valley Bank failed, disrupting the entire North American tech sector.