Law Firms Watch Howrey’s ‘Prescient’ Associate Training, Despite Drag on Profits
Howrey’s profits suffered after it capped billable work for new associates at 700 hours and lowered their billing rates, but that hasn’t stopped other law firms from expressing an interest in the program that pays less and trains more.
Howrey made the changes last year as part of a “prescient” two-year associate training program, the Washington Post reports. The firm dropped salaries for its first-year lawyers to $100,000, plus a $25,000 completion bonus or student loan stipend. But the associates devote more time to training, including three months’ of work at clients’ legal departments.
Some clients are more willing to pay for work by new associates as a result of the changes, but Howrey is still suffering. “What saves clients money costs the firm,” the story says. Howrey’s gross revenue dropped 16.3 percent in 2009 and its profits per partner dropped 34.9 percent, leading to layoffs of staffers, associates and even partners.
Despite Howrey’s bad financial news, other law firms are also adopting training programs and eliminating lockstep compensation, a step taken by Howrey in 2007. Eileen Billinson, a member of Howrey’s executive team, told the Post that she’s hearing from many law firms interested in changes. “I get an awful lot of lunch invitations that turn into something more like depositions,” she told the Post.
