March 9, 2011 5:45 PM
Howrey to Dissolve Effective March 15
Posted by Brian Baxter
UPDATE 3, 3/9/11, 8:15 p.m. EST
Howrey partners voted Wednesday to dissolve the firm, effective March 15, the firm announced in a press release issued late Wednesday.
"The firm had experienced disappointing financial performance over the past two years and subsequently several partners had resigned," firm chairman and CEO Robert Ruyak said in a statement issued by the firm. "This resulted in the conclusion that an orderly wind-down of the firm's activities over time was the only practical alternative."
The dissolution vote by the full partnership started at 11 a.m. EST Wednesday, as reported earlier. According to two current Howrey partners, a "supermajority" of 85 percent of Howrey's partnership shares was required in order for the firm to dissolve.
On Wednesday afternoon, a Latham & Watkins spokeswoman confirmed to The Am Law Daily that corporate restructuring and bankruptcy partner Peter Gilhuly is advising Howrey on its wind-down efforts. Gilhuly, who works out of Latham's Los Angeles office, has previously advised on the dissolutions of Thelen, Darby & Darby, and Brobeck, Phleger & Harrison.
Howrey partners that spoke to The Am Law Daily on Wednesday--all of whom requested and received anonymity in order to speak freely--say that Gilhuly ran Wednesday's proceedings. The two current partners who spoke about the partnership vote say that they both voted in favor of dissolving the firm.
"Once you lose a certain mass, you just can't get it back," one partner says. "It's just a matter of days right now." Adds the second partner: "I did it with a heavy heart, but if we don't vote for formal dissolution, if you think it's chaos now, it's just going to turn into a disaster. You don't want it to be a situation where the last person turns out the lights."
As reported earlier by The Am Law Daily and confirmed by the firm's statement, a dissolution committee of Howrey partners appointed by the executive committee will oversee winding down the firm.
In addition to a simple "yes" or "no" vote on dissolution, Howrey partners also voted on some simple amendments to the firm's partnership agreement, the two Howrey partners say. One of those matters involved officially changing the firm's name to Howrey LLP.
One of the Howrey partners who spoke to The Am Law Daily noted that the firm's partnership agreement contains a 30-day notice period for any partners seeking to leave, and that any partners still with the firm cannot depart until March 15.
The Am Law Daily reported last Friday that Howrey would vote on dissolution this week. One current Howrey partner says that a dissolution plan was circulated to partners before the weekend so that they could review it prior to Wednesday's vote.
Partner departures from Howrey have continued in recent days, with a group of IP lawyers joining Perkins Coie on Monday. Last week Fiona Philip, a former Howrey securities partner in D.C., joined Sidley Austin in a counsel role. K&L Gates announced on Wednesday that it had hired Howrey corporate partner Maria Tan Pedersen in Washington, D.C.; she will join the firm's Hong Kong office.
A spokesman for Dewey & LeBoeuf told The Am Law Daily on Wednesday that the firm expected to bring on several Howrey partners, although he declined to name them.
The Howrey announcement also addresses the status of reported ongoing talks between the firm and Winston & Strawn, which apparently stalled over the past week. It says: "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. Those partners will be joining other Am Law 100 firms."
Among those moves will be one that has appeared in the legal blogosphere in recent days: Sean Boland, the firm's vice-chair and the person leading negotiations with Winston, appears to be headed for Baker Botts, the two current Howrey partners say. (A Baker Botts spokesman did not respond to a request for comment, nor did Boland or a Winston spokesman.)
In an interview with The Wall Street Journal on Wednesday, Ruyak attributed Howrey's problems in part to an over reliance on contingency fees and the outsourcing of discovery work to third-party vendors.
Ruyak did not respond to several requests from The Am Law Daily for comment. The American Lawyer first reported on Howrey's troubles last year.
The firm has seen more than 140 partners depart since April 2010, according to an analysis based on a document prepared for the firm's annual partnership meeting that month and provided to The Am Law Daily by a former partner. That document listed 297 partners and of counsel. If anything, the Howrey diaspora means that many of the firm's lawyers will see friendly faces wherever they land.
"The beauty of Howrey is that anywhere you go, there's always former partners," says one current partner, only half-joking.
Additional reporting by Nate Raymond and Julie Triedman.
Contact Brian Baxter at email@example.com