Biglaw, Howrey LLP, Law Firm Mergers

Howrey Going to Make This Merger Happen?
(Plus two interesting internal emails.)

Developments are flying fast and furious out of Howrey. Yesterday we passed along reports that Howrey’s merger talks with Winston & Strawn were off. Today we’re hearing that they might be back on (or that they never stopped in the first place).

According to the U.K.-based Legal Week (via the ABA Journal), the talks are ongoing. The parties are represented by Thomas Fitzgerald, managing partner of Winston, and Sean Boland, vice chairman of Howrey. Winston is apparently attracted to antitrust at Howrey, an area where Winston wants to expand.

Corroboration of continued Winston / Howrey discussions from a U.S. source, plus some interesting internal emails from Howrey leadership, after the jump.

After we wrote about the supposed demise of Winston / Howrey merger talks — word on the street was that Winston was just going to cherry-pick Howrey partners and practices — a reader at Howrey contacted us to disagree:

[On Tuesday, Winston & Strawn] met with the Houston office and stated that the merger was still on and offers would be coming Friday. They stated that they were NOT going to pick and choose. I know this is in contrast to what has been reported elsewhere, but being that it happened yesterday, and associates and partners were present, leads me to believe that the blogs have it wrong. Time will tell.

We suggested that this sounded more like Winston picking up large chunks of Howrey, maybe even entire offices — just like Sonnenschein picked up 100 lawyers from Thacher Proffitt, during TPW’s final days. We noted that potential client conflicts might prevent a full-on merger between Winston and Howrey. Responded the source:

There are true conflicts, but it was clearly stated that it is a “merger” and that offers would be going to all offices (not just Houston) on Friday.

Based on the known conflicts, I’d expect over 95% of the current employees getting offers. Of course, that doesn’t mean all will join in the merger…

Again, this seems a bit strange. If individual Howrey attorneys are getting offers from Winston tomorrow (Friday), that sounds less like a merger and more like Winston picking up (lots and lots of) lawyers from Howrey. It might be the functional equivalent of a merger, depending on how many get offers, but it’s not technically a merger.

Howrey has been compared to a ship — by partner (and former naval officer) Richard Beckler, in an email reprinted below, and by an unnamed Howrey partner in California, who told The Recorder that Howrey might “take a torpedo or two,” but probably wouldn’t sink.

Fair enough. But if the USS Howrey does start taking on water, will Winston be selective about whom it rescues? A Howrey tipster tells ATL:

I’m most curious about whether firm management is really cooking up a deal that allows certain people to move to Winston & Strawn, while leaving others behind. I’m not [involved in the Winston talks], so there may be more to the story than I realize. But a deal like that really seems like dirty pool to me, because it suggests firm management is using its power and inside info on billings, accounts, etc. to advantage itself, and to disadvantage others. This seems like a violation of management’s fiduciary duty to the rest of the partnership.

A second Howrey source makes the same point more bluntly: “[Firm chairman and CEO Robert] Ruyak and his minions have guarantees from W&S and will be bailing out and leaving staff and associates and some partners with nowhere to go.”

In fairness, this is all highly speculative. Thus far, Ruyak and the other powers-that-be at Howrey have spoken quite optimistically about the firm. Check out the two firm-wide emails reprinted below, one from Richard Beckler, co-chair of the securities litigation and white-collar practice, and one from Ruyak.

Both sound positive. Beckler refers to Howrey as a “strong ship,” and Ruyak touts Howrey as a “strong, effective and successful team.” Ruyak feels that the firm isn’t getting a fair shake from the media:

Over the last few weeks, we have seen several negative articles in the press and on the blogs about Howrey. They are upsetting to read and, without a true factual basis, have created questions about a firm to which we have all devoted so much time and energy.

Many of these articles refuse to believe that the firm made a conscious decision to restructure several months ago and that it has done so throughout the past year. Our clients understand what we are doing as most of them have had to do the same thing. Downsizing is hard and it is painful…. But we have done it, and for the most part effectively.

Maybe some of the partners who left in the first half of 2010 could be squeezed under this rubric. But the most recent departures, from December 2010 and January 2011, sure don’t sound like “downsizing.” These defectors were firm leaders and major rainmakers, including litigation co-chair Gary Bendinger, London head Mark Hodgson, Brussels head Trevor Soames, and vice-chairman Henry Bunsow (who had a reported $20 million book of business).

Were these powerful partners really “downsized”? Strategic amputation does not encompass decapitation.

Some observers are experiencing Howrey schadenfreude. Indeed, that’s the title of a blog post by Professor Stephen Bainbridge, who disagrees with Above the Law’s earlier reference to Howrey’s “widely admired culture” and states that he is “root[ing] for the vulture.”

We do not partake in the schadenfreude. If you’re currently at Howrey, we wish you good luck. Feel free to update us on what’s going on, by email or by text (646-820-TIPS, or 646-820-8477). Thanks.

Howrey Schadenfreude [Professor Bainbridge]
Howrey and Winston & Strawn in discussions over potential tie-up [Legal Week]
Are Winston and Howrey Talking About a Merger After All? [ABA Journal]


HOWREY LLP — RICHARD BECKLER — INTERNAL EMAIL

From: Beckler, Richard
Sent: Friday, January 21, 2011 7:53 AM
To: Ruyak, Robert; .Howrey-All
Subject: Re: press statements- response

I have just read Bob’s statement and I want to reiterate his thoughts in my own words. As a young Navy officer both in Officer Candidate School and while serving on Board the USS Yorktown-an aircraft carrier in the Pacific, we were always taught and always understood that the strength,stability and ability to accomplish our mission derived from our ability to work as a group and to be responsible to each other , our individual needs though important were in a sense sublimated so that our ship could accomplish its mission. Today as we know many in the firm have concerns on various issues, but I for one know that Howrey is a “strong ship” and will accomplish its goals and mission and I intend to be a part of that effort. I hope all of you will share in that goal. Sincerely, RWBeckler


HOWREY LLP — ROBERT RUYAK — INTERNAL EMAIL

From: Ruyak, Robert
To: .Howrey-All
Sent: Fri Jan 21 02:13:30 2011
Subject: press statements

Over the last few weeks, we have seen several negative articles in the press and on the blogs about Howrey. They are upsetting to read and, without a true factual basis, have created questions about a firm to which we have all devoted so much time and energy.

Many of these articles refuse to believe that the firm made a conscious decision to restructure several months ago and that it has done so throughout the past year. Our clients understand what we are doing as most of them have had to do the same thing. Downsizing is hard and it is painful. While this is not the reason for all of the departures, we must remember that everyone’s personal situation is different and the reasons people choose to leave vary. Every one of us has had to adjust – sometimes several times- to losing friends, colleagues, bosses and support and as we learned new ways to accomplish our work. But we have done it, and for the most part- effectively

Please remember that our glass is much more than half full. We have excellent clients, first rate lawyers and staff and we compete successfully in the three practice areas where we focus. None of that has changed. What has changed is our headcount- nothing else. We are simply a smaller, more efficient firm.

We have been in the trenches together and have had incredible successes, many of them very recently. We are there for each other on our cases and otherwise – when someone suffers a personal loss or is ill – the Howrey family always comes through. We cannot forget this, especially now. We should remain proud of what we all have helped to build and the legal services that we provide and will continue to provide to our clients.

We remain a strong, effective and successful team.

Bob Ruyak

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