Law firm Howrey to dissolve next week
Friday, March 11, 2011
The Howrey law firm in Washington announced late Wednesday that it will dissolve on Tuesday, making it the latest victim of a recession that has exposed cracks in the law firm business model and revealed the risks of rapid expansion.
The vote by partners, which lasted much of Wednesday, comes after months of speculation that the firm would close its doors following an exodus of high-performing lawyers, who left for competitors after Howrey posted lackluster financial results. Those present at the meeting selected a committee to oversee the winding down of the firm's affairs, which will be supervised by a legal team from the law firm Latham & Watkins.
"The firm had experienced disappointing financial performance over the past two years and subsequently several partners had resigned," Chairman Robert F. Ruyak said in a statement after the vote. "This resulted in the conclusion that an orderly wind-down of the firm's activities over time was the only practical alternative."
The 55-year-old firm once had 700 lawyers spread across 18 offices in the United States, Europe and Asia, including more than 250 based in the District. After reporting more than $570 million in revenue in 2008, Howrey seized on the opportunity to expand by taking in groups of lawyers from competitors and firms that stumbled early in the recession.
But when firm revenue dwindled in 2009 and 2010, the profit earned by top partners dropped, prompting more than 100 to leave Howrey with key clients, nearly emptying its offices in Europe and California.
About 80 partners remained in Howrey's District office at the time of the dissolution vote. In addition, the firm sent layoff notices to 480 employees in the District and its litigation center in Virginia. They will have the option of remaining at the firm during its 60-day wind-down period and receive job-hunting assistance.
Although Howrey had explored a deal with the Chicago firm Winston & Strawn, which had expressed interest in hiring a large number of Howrey lawyers, including its antitrust group in Washington, the firm confirmed that the arrangement largely fell through.
"A group of partners, associates and staff, mostly from the firm's Houston office, will join Winston & Strawn; however, many others were unable to do so because of significant client conflicts," Ruyak said.
It is expected that groups of local Howrey lawyers will splinter off to other firms, some probably joining colleagues who have already left for the local offices of firms that include Baker Botts; Morrison & Foerster; Jones Day; Paul Hastings Janofsky & Walker; and Pillsbury Winthrop Shaw Pittman.