The Wall Street Journal spoke with Bob Ruyak, who provided two RIDICULOUS reasons for Howrey's collapse, neither of which pass the laugh test.
1. Ruyak claims that the evolving legal market over the last few years forced Howrey to accept several contingency billing arrangements, which caused swings in Howrey's profits, which therefore drove partners away because they have "very little tolerance for change [in billing arrangements] and very little tolerance for fluctuation in profits." First, nice dig at your fellow partners, Mr. Chairman & CEO. Second, if this were true, wouldn't every large law firm be collapsing Howrey-style?
2. Ruyak blames the rise of third-party document discovery specialists that could provide litigation support at substantially lower rates than Howrey, which has many offices in big cities and therefore, higher costs. Howrey just couldn't compete with that. But as with #1 above, if this were true, wouldn't every large law firm be collapsing Howrey-style?
No analysis from WSJ at all. You know what you call that? CrapAnalysis.
[UPDATE: As a few commenters have noted, Ruyak said "merger was never an option." On its face, this is a preposterous comment, but for different reasons than are immediately apparent.
The transaction Winston contemplated with Howyak was a strategic cherry picking raid under the guise of a merger. Under that guise, Howyak could provide financial information to Winston that would never be allowed in a traditional cherry picking raid because it would be a breach of fiduciary duty to the partnership. Winston offered jobs (note that in a merger, you usually do not receive a job offer) to the portions of Howrey that it was interested in, and discarded the rest. So in a sense, I think Ruyak was right in that a true merger was never an option. Regardless, as commenters have noted, it's definitely a doozy of a comment worthy of mention.]