It looks like a high percentage of Howrey's partners have accepted Winston's conditional quasi offers, particularly in the Washington and Houston offices. It's just that we are down to less than a week for Howrey partners to make their final decisions, Howrey would like to start winding down its operations by March 1, and just about everyone outside of DC and Houston has left the fold. Next week will be quite interesting indeed.
I recently came across a fascinating court document detailing what happened during Brobeck's final days. This document is the report of Brobeck's bankruptcy trustee, which has some juicy details on pages 5-6 about Brobeck's rise and epic fall. The language could just as easily apply to Howrey today. The details might be a bit different, but the pattern is definitely the same:
In the late 1990s and early 2000s, Brobeck adopted a business plan, which required continual rapid growth. Fueled by a booming technology-sector practice, Brobeck rapidly expanded through 2000, nearly doubling the number of its attorneys in just over three years. During that period, Brobeck also opened several lavish new offices and expanded others in like manner, incurring substantial debt and excessive and expensive lease obligations. Brobeck’s aggressive growth strategy constituted an enormous one-way bet on its continued expansion. ... In the first quarter of 2001, when the expansion had failed to materialize, Brobeck dramatically increased its bank borrowings from approximately $34 million to over $71 million. As set forth in more detail below, these factors—excessive leasehold commitments and other costs, rising debt obligations, declining revenues, and excessive distributions to partners—combined inevitably and predictably to create a death spiral from which Brobeck could not recover ... .
There is a fascinating (really!) chart detailing how Brobeck took out more and more office space measured in square feet per partner at greater and greater cost as Brobeck's collapse approached on page 7. I think about all of Howrey's spare square footage in the Warner Theater, Houston, Irvine, Chicago, New York... . Wow. Those leases can kill you.
The document is definitely worth the read, and a very likely a good sneak preview of the process that Howrey's partners can expect to face.