March 14, 2012 6:12 PM
Checking in With Some of Howrey’s Lesser-Known Lawyers a Year After the Firm’s Death
Posted by Sara Randazzo
By the time Deborah Furth started her legal career in Howrey’s San Francisco office in the fall of 2010, something didn’t feel right.
For one thing, there was less work for her to do than there had been during her summer associate stint in 2009. For another, it was fairly obvious that an unusually large number of partners appeared intent on leaving the firm.
“Everything seemed to be a little different tempo than when I was there in the summer of ’09,” Furth says. “The murmurings started by early November. By late November, the murmurings got louder.”
Before long, the murmurings grew to a roar, and within six months, everyoneâ€”including Furthâ€”was gone following a vote of the 55-year-old firm’s partnership to dissolve as of March 15, 2011, a year ago Thursday.
As Howrey spiraled toward death, it was the outbound moves made by the attorneys with the largest books of business that grabbed most of the headlines. But for every major partner wooed by another large firm, there was an associate left behind; a counsel who suddenly saw a relationship with a major client cut short; or a non-equity partner who decided to strike out on his or her own.
While the majority of Howrey’s former lawyers wound up landing at other large law firms, dozens of attorneys whose careers were upended by the firm’s collapse saw an opportunity to leave large firm life behind. Interviews with a half-dozen such lawyers reveal a generally happy group that rarely looks back andâ€”even when faced with new challenges as a result of changing courseâ€”has no qualms about trading the rigid structure of a firm like Howrey for more entrepreneurial ventures.
David Anderson, a nonequity partner in Howrey’s Chicago office for five years before leaving late last February for three-attorney insurance recovery shop Hoke LLC, certainly feels that way.
Anderson, 48, says he had already been considering his options for a year by the time he started actively looking for a new job in late 2010. And though he ended up entertaining offers from other large firms, the lure of joining a smaller enterprise grew stronger as the weeks passed.
“I was starting to feel that being a partner at a large Am Law 100 firm was becoming in some ways a form of indentured servitude,” Anderson says, pointing to the $650-an-hour rate he had to charge to help the firm keep pace with its expenses and the loans he and others took to cover capital contributions. Even as a nonequity partner, Andersonâ€”along with everyone else who shared his statusâ€”had been asked to ante up capital in 2009 following a partnership retreat in Florida.
“When I look back on that, I question what was known at the time by firm management,” Anderson says. What he knew was that, even though he found the requirement outrageous and a significant departure from what most firms expected of nonequity partners, if he didn’t come up with $32,500, he would most likely be asked to leave the firm.
As Anderson now knows, the problems that led to Howrey’s downfall had already begun by the time the 2009 retreat was held, according to a chronicle of the firm’s fall published in The American Lawyer‘s June 2011 issue. (For the latest updates on how Howrey’s bankruptcy is coming along, check out our story here).
Today, Anderson, who joined Hoke less than two weeks before the Howrey dissolution vote, says he has the freedom to make his own decisionsâ€”and to set lower billing rates for clients who turn to him to recover less than $3 million in insurance funds, compared to the hundreds of millions of dollars at issue in cases he handled at Howrey.
Now, instead of worrying about a partner calling to ask why his billable hours are down in a given month, Anderson can leave the office to spend time on client development or work, stress-free, on a non-billable project. “I don’t think I spend less time working,” he says, “but I think I’m considerably happier.”
William DeVan feels the same way. DeVan, a counsel in Howrey’s Washington, D.C., office, took a chance and launched his own firm late last February. Part of a 40-lawyer group of construction specialists that joined Howrey from now-defunct Thelen in 2008, DeVan struck out on his own after deciding that he didn’t want to move to another large firm only to end up living through a third dissolution.
In contrast to the way it moved en masse from Thelen to Howrey, DeVan’s construction group began to splinter in Howrey’s final months, with smaller groups going to Jones Day, Pillsbury Winthrop Shaw Pittman, and other firms. Amid the churn, several construction attorneys, including DeVan; John Ralls and Sam Niece, who formed Ralls Niece in Silicon Valley; and Paul Berning, who is now a solo practitioner in Alameda, California, opted to launch their own shops.
For DeVan, going solo meant packing up his work on a major project for Hunt Construction Group, with the blessing of the Hunt relationship partner at Howrey, and finding new office space.
“For years I toyed with idea of going out on my own,” DeVan says. “That’s a significant risk when you have a wife and three kids you’re supporting.”
The risk paid off when just three months after DeVan’s February 22, 2011, departure from Howrey, Hunt asked if he would consider signing on as the company’s outside assistant general counsel. It didn’t take him long to accept the offer. Today, DeVan says Hunt work consumes most of his time while offering him the opportunity to take on a broader range of assignments than he ever could have at Howrey. That’s partly because the company pays him on a retainer basis rather than having him bill $495 an hour.
Following a former Howrey client also paid off for Anne Ortel, who began her Howrey career in the East Palo Alto office in 2007.
As the firm began to show signs of cracking in 2010, Ortel found herself in the peculiar situation of being on loan to a client, Future U.S., which at the time published primarily print magazines about gaming, technology, and hobbies. Because she spent most of each week at the Future offices, Ortelâ€”who was by then a senior associateâ€”says she missed many of the tense days leading up to the dissolution. Even so, she got enough of a sense that something was awry that, after resisting Future’s offers to join the company full time for months, she finally relented in February 2011.
Since then, Ortel, Future’s lone in-house lawyer, has helped the company transform itself from a traditional print publisher to a digital content producer. “I’ve really enjoyed having a hand in the direction of that,” she says. “As an associate you don’t have a hand in the direction the firm goes. You can try. But you donâ€™t have as much control.”
In the rush to land new jobs once Howrey dissolved, some of the firm’s former attorneys landed in less-than-ideal situations knowing they may be on the move again soon.
Arden Levy, a counsel in the Washington, D.C., office, was initially happy with the small firm she jumped to, Bailey Gary, though she still dreamed of one day owning her own practice.
Last month, she acted on that dream, leaving the boutique (now called Bailey Law) to open a solo practice focused on insurance recovery work.
“I didn’t have any clients of my own 12 months ago,” says Levy, who joined Howrey as an associate in 2001. As counsel, she largely ran other lawyers’ cases and managed others’ clients, billing about 2,100 hours a year. “It’s not that hard to [build a book of business]. It just takes persistence. I like it. I’m just thrilled to be out on my own.”
Former associate Furth was far from thrilled about her plight at first. One of 19 attorneys in Howrey’s first-year class in 2010â€”and a participant in a newly launched apprenticeship program that stressed training over billable work, at a below-market starting salary of $100,000â€”she had barely begun to learn the basics of document review before being put in the unenviable position of finding a job as a newly minted lawyer.
With no work to speak of, Furth rarely came to the office. When she did make her way in, it was to fill another shredder with the remnants left in the wake of another partner’s departure. “Your time,” she says, “was better spent job searching.”
As she began her search, Furth was further daunted by the fact that some of those with whom she interviewed seemed more interested in Howrey’s woes than her credentials, with one big firm partner telling her bluntly: “You do realize you are 150 percent unemployable?”
In the end, that statement proved 150 percent wrong. Indeed, it only took Furth until May to find a job with litigation boutique Bowles Verna in Walnut Creek, California. “I can’t explain to people how happy I am,” says Furth, who says she has already second-chaired a trial and gotten countless other opportunities that wouldn’t have been available to her as a second-year associate at big firm.
Still, Furth hasn’t forgotten the uneasy feelings of those final few months, when she and other associates felt they’d been largely abandoned in a leaderless office. Looking back, Furth says the experience gave her “a very different view of big law” than others likely have. “But I’m not pessimistic at all,” she says. “I’m not angry. I’m not irate. I’m not upset. â€¦ I have a deeper understanding of places I’m glad I’m not in. If nothing else, that’s been a great benefit to me.”
As with virtually any job change, the move from big firm to small has had its drawbacks. For Levy, one of the main ones is no longer having a staff to help with logistical details. One of her most difficult days in the past year, she says, was her first day at Bailey Gary, when she had to prepare a retainer letter for a new client and send out a legal document related to an insurance issueâ€”all before Passover started at sundown. “I think I wasted about four hours that morning, because they had the new Microsoft Word,” she says.
Anderson says the biggest challenge was having to almost immediately find his own health insurance after learning that Howrey’s dissolution made it impossible for him to obtain COBRA coverage. “It was a fascinating and horrifying experience applying” for an individual plan, he says, adding that he probably spent 50 hours sorting it all out.
For Ortel, who says that Howrey still owes her a bonus promised in late 2010, one major challenge that arose soon after she joined Future was trying to finish a pro bono assignment she started at Howrey without the benefit of a pro bono practice. With the help of a former Howrey partner, Ortel continued her representation of a taxi driver sued by an insurance company following a car accident, ultimately losing at trial but winning a default judgment against his former employer to pay the damages.
Difficulties aside, all the members of the Howrey diaspora interviewed for this story say they feel fortunate to have landed where they did, and that the change of direction has been much more rewarding than big firm life.
Levy recalls coming into the Howrey offices on March 30, the day associates received termination notices, and finding what she describes as “a scene from a movie set”: stacks of boxes, empty binders strewn across the floor, clothing still left on hangers in hastily abandoned offices.
“I don’t ever want to be in that situation that I was in last year again,” says Levy. “I do not want anyone else controlling my destiny. I would like to control my own destiny.”
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