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On the wall behind the receptionist on the eighteenth floor of a downtown Toronto office tower, chrome-colored letters spell out the name of one of Canada’s most talked about law firms: Donahue & Partners, Barristers & Solicitors. But the matching letters adorning the wall above the gray leather couch in the waiting area are what give so many lawyers palpitations: Ernst & Young.

Most of the discussion of the Big Five accounting firms forays into legal services focuses on affiliations, mergers, and other arrangements in Europe. But already one accounting firm has established a legal-services toehold in North America, in a jurisdiction both geographically and culturally closer to the United States. Two years ago the Canadian arm of Ernst & Young established the so-called “captive law firm” now known as Donahue & Partners. Just what exactly is Donahue & Partners, and how has Ernst & Young managed to navigate the regulatory pitfalls that prohibit multidisciplinary practices or partnerships, commonly known as MDPs?

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