Will Howrey Defections Become an ‘Avalanche’? Answer Could Come in Days
The fate of the 55-year-old Howrey law firm could be determined in the next few weeks, or even days.
Howrey has lost more than 60 lawyers in the past year, the Washington Post notes, and now more than three-quarters of the remaining partners are weighing offers to join Winston & Strawn. Managers at both firms are pressing for a quick decision.
According to the story, a “trickle” of lawyers leaving the firm “has swelled into a wave of departures. Howrey’s vice chairman and managing partner of its San Francisco office, the managing partner of its Chicago office, the co-chairman of its white-collar group, the leader of its class-action litigation practice and more than a dozen others have left for competitors, leaving some industry watchers to wonder if the venerable Washington firm can stem the tide.”
The problems began with “mass defections” overseas late last year, the story says. First, most of the staff in Amsterdam, Madrid, Brussels and Paris formed a new law firm with European managing partner Willem Hoyng. Then came the loss of the managing partner of Howrey’s London office, Howrey’s lawyers in Taipei, Taiwan, and the head of Brussels office. The defections spread to the United States, despite assurances by Howrey managing partner Robert Ruyak that the losses were part of some planned cutbacks implemented after a 30 percent drop in revenue in 2009.
The Post interviewed law firm consultant James Cotterman of Altman Weil, who said loan covenants will determine whether Howrey can continue to obtain credit. “Even if a firm has enough partners, it might not have enough of the right kind of partners,” he explained. After departures begin, “if you don’t get on it really fast, it’s like an avalanche: It gathers steam quickly as it goes downhill.”
Previous coverage:
ABAJournal.com: “Accept Winston & Strawn Offers ASAP, Howrey Chairman Reportedly Urges Colleagues”
ABAJournal.com: “As Howrey Hemorrhages, Observers Speculate re Possible Debt Issues, Winston Exposure”
ABAJournal.com: “11 Howrey Lawyers Jump to Morgan Lewis in Latest Round of Defections”
ABAJournal.com: “Average Howrey PPP Plummeted to $550K in 2010, Ex-Partner Says”
ABAJournal.com: “As Howrey Profits Plummet, Partner Says ‘We’ll Take a Torpedo or Two’ But Likely Won’t Sink”
ABAJournal.com: “Howrey MP Says Outsourcing, Electronic Discovery Spurred Partnership Downsizing”
