Sunday’s Washington Post offered a thought provoking post-mortem on Howrey’s demise: Why Howrey could not hold it together.
It is hard not to respect Howrey for their continuous pursuit of innovation. (They also pulled off one of those amazing “only in DC” coups by having a Pennsylvania Avenue address even though they were in a building on E St NW.)
Steven Pearlstein’s story suggests that they were either the first or one of the first law firms to pursue a litany of novel strategies:
- Branding themselves and creating a slogan: “In court every day”
- Aggressively pursuing a “free agency” growth strategy – – poaching laterals at a time when it was “not done” in a “genetleman’s” profession.
- Swapping out the traditional summer associate bacchanal and replacing it with a bootcamp (about a decade before the recession hit)
- Opening a offsite ediscovery facility in the suburbs of DC
- Opening an office for off-shoring ediscovery in India
- Abandoning lockstep pay for associates
- Initiating an apprenticeship model for associates
Drum roll please:
- In a profession of PC users, Howrey remained a committed Macintosh shop through the 1990’s. According to an April 2000 Law Technology News story Howrey lawyers even posed for a Power Macintosh ad in the mid 1990’s.*
* I confess I tried to find the Howrey PowerMac ad but came up short, but I can instead offer to delight and amaze you with a Youtube montage of Macintosh ads from the late 1990’s. The only lawyer I recognized here was Gandhi. But anyone who was a member of their firm’s “Y2K Committee” in the late nineties must see the parody mash up of Hal (from the 2001: a Space Odyssey) and the Y2k bug.
Why is Howrey Gone? Of course the economy was a factor, but Pearlstein cites other recent trends in the law firm marketplace including, the conversion of firms from true partnerships with shared personal risk to “no personal risk” LLPs and LLCs. Pearlstein suggests that the “free agency” model which was responsible for Howrey’s growth was also partially responsible for its demise. The combination of the easy bail out and the LLP/ LLC structure of law firms creates a disincentive for partners to make a commitment to invest years in trying to resurrect a troubled law firm.
Whither Partnerships? or Wither Partnerships? Pearlstein concludes by suggesting that law firms will continue to fail unless they recommit to the traditional partnership model and stop focusing on the pursuit of “profits per partner.” I see evidence of a completely different future. I have recently had two separate conversations with former law school colleagues who are now large law firm partners. Two partners, in two different firms, in two different cities echo the same complaint. They as partners can’t find associates willing to stay with them to pull “all nighters” and work weekends. Both partners independently reported that bright young associates from the best schools refuse to put the practice of law ahead of their personal interests. Furthermore the next generation of associates appears to have no interest in making partner at all. So the bigger question may not be how many firms will continue to thrive but will any firm survive as a partnership if there are no associates grabbing for the “golden ring” of partnership?
Howrey is gone but it’s website lives on:
Howrey’s New Model: A Two-Year Associate Apprenticeship (June 2009)
Howrey hits India for “low-cost option” (February 2008)
“Howrey bucks trend with merit pay plan” (July 2007)