Yesterday we reported on layoffs at Howrey. Our sources told us that 100 people were axed, but a Howrey spokesperson declined to give us firm numbers.

It turns out that our sources were pretty accurate. The firm confirmed to AmLaw Daily today that it laid off 94 people: 29 associates and 65 staff, from 10 offices. A tipster says one-third of the “reduction-in-force” took place in Howrey’s D.C. office.

The rumor mill at the firm is still churning, though, claiming that Howrey has taken a number of actions to cut costs — and that the number of laid-off individuals may be higher than 94.

Update: Howrey has confirmed that 94 people were laid off. More information here.

Howrey LLP has been generating a lot of news recently. Last week, the firm got hit with a $30-million racial discrimination suit by a former Brussels-based associate. But the rumor mill there was already churning with other, more depressing news here in the U.S.

Sources say that 100 people were laid off today. The firm has confirmed that layoffs took place, though it won’t confirm the numbers. Update (Feb. 3): Howrey gave solid numbers to AmLaw Daily today. The 100 figure was pretty accurate. The exact figure was 94 people: 29 associates and 65 staff. We’ve also heard reports that the firm asked some associates to go part-time

From a tipster:

Howrey has just internally announced sweeping layoffs, something everyone here saw coming for a very long time once the 2009 numbers came out. This is the first time I’ve heard Howrey actually use the word “layoff” in an e-mail to its associates.

An email went out this afternoon from managing partner and CEO Bob Ruyak. Here’s an excerpt from the email, available in full, along with a firm statement, after the jump:

While demand from clients for our services remains stable, it does not, unfortunately, provide enough work for all of our attorneys and staff to be fully utilized.

This contradicts what associates were told on a recent firmwide conference call…

The Great Recession just wouldn’t be as fun without the occasional employment discrimination lawsuit. The Blog of the Legal Times reports that Howrey is getting slapped with a discrimination lawsuit from one of its former associates who — surprise — hasn’t been able to find employment since the firm let her go:

Kamisha Menns, a black woman born in Jamaica, says in the complaint, filed in D.C. Superior Court today, that Howrey violated the D.C. Human Rights Act by retaliating against her, creating a hostile work environment, and inflicting emotional distress, both intentionally and negligently. Menns has asked for $30 million.

You’d expect a major D.C. firm like Howrey to be very politically correct. Aside from the occasional Obama joke (it’s racist to joke about Obama — j/k — or am I?), I wasn’t sure what form this alleged discrimination would take.

Alas, it appears that Menns’s troubles started in Brussels. That’s a shocker! Given how wonderfully the Belgians managed their colonial empire in Congo and Rwanda, I can’t imagine that anything could possibly go wrong for a young black woman in that country….

In yesterday’s post regarding the tragedy that left a Howrey associate, Elizabeth Fontaine (pictured), and three of her family members dead, we promised to keep you posted on new developments. We now bring you this update, from the Orange County Register:

Sheriff’s investigators believe they know how four people, including two young sisters, died in a bloody heap Monday inside a million-dollar home in Talega.

Grandmother Bonnie Hoult, 67, fired the gun that killed her daughter and grandchildren before turning the .357 magnum on herself, a senior homicide investigator told the Register, citing the department’s prevailing theory behind the killings that rocked a gated community.

He said her daughter Elizabeth Fontaine, 38, appeared to have been a willing participant in the killings, with both she and her mother choosing death for themselves and the girls instead of allowing the sisters to be sent temporarily into the custody of a sister of their father.

More about these modern-day Medeas, after the jump.

Tragedy struck the Irvine, CA, and Houston offices of Howrey earlier this week. The ABA Journal reports:

A Howrey intellectual property lawyer was found dead along with her daughters and mother Monday in an apparent murder-suicide.

Associate Elizabeth Fontaine, her two daughters and her mother were killed on the same day that a California judge gave temporary custody of the girls to an aunt, according to the Los Angeles Times’ L.A. Now blog and the Associated Press. Authorities are conducting forensics tests to determine who pulled the trigger.

Howrey confirmed that Elizabeth Fontaine was a Howrey employee in a firm-wide email yesterday. The email, plus AN UPDATE, after the jump.

We continue our slog push through the nation’s 100 top law firms, as ranked by our friends over at Vault. Here are the next ten firms, to be discussed in the comments to this post:

71. Reed Smith
72. Bryan Cave
73. Perkins Coie
74. Hunton & Williams
75. Patton Boggs
76. Arent Fox
77. Schulte Roth & Zabel
78. Howrey
79. Chadbourne & Parke
80. Crowell & Moring

Assorted observations about these firms, after the jump.

First years to 100K and an “apprenticeship”?

In the past two months, we’ve reported on three firms instituting an apprenticeship model for first year associates: Drinker Biddle, Howrey, and Frost Brown Todd. “Apprentices” start at the firm at a lower salary and are not billed out to clients, billed out at a lower rate than normal associates, or billed out for lower total hours. It sounds like an apprentice is a “paralegal plus.” Of course, that “plus” includes a J.D. and its accompanying law school debt.

Still, when we polled you last week, almost 70% of ATL readers who voted said they were in favor of Howrey’s $100K-plus-professional-training apprenticeship.

The National Law Journal (subscription) has an extensive piece on apprenticeships (noting two other firms that have instituted the practice — labor firm Ford & Harri­son and Dallas’s Strasburger & Price):

These firms are putting new recruits through additional apprenticeship programs that they say will better train their attorneys for life at a law firm and for handling clients. Think of it as the equivalent of a medical residency, only with suits instead of scrubs.

The latest — and so far largest — firm to move to an apprenticeship model, 659-lawyer Howrey, announced its program last week. Starting next year, first-years at the firm will get a pay cut — from $160,000 to $100,000 in base pay plus a $25,000 bonus to pay down law school loans — and they’ll spend a good portion of their time attending classes with partners and shadowing them on client matters. The apprenticeship period will last two years.

Are law students really like medical students, in need of on-the-job training in order to operate in the real world? If apprenticeships become widespread — which admittedly seems unlikely once the tough economic times are behind us — should the training at a firm mean one less year in law school? Firm salaries are going down, but law school tuition is going up. Maybe it’s time to rebalance.

A round-up of the salaries for BigLaw apprentices, and a poll on how law schools should be reacting to deflating salaries, after the jump.

Welcome to the future. Like Drinker Biddle did in May, Howrey is changing the nature of the first and second year associate experience. The firm is moving to more of an apprenticeship model. New Howrey associates will receive an emphasis on training and take a significant reduction in salary.

The memo from Howrey explains some of the top-line goals of the new program — called the “Tier 1 Associate Program.”

Participants in Howrey’s Tier 1 Program will spend only one-third of their time during the first year on client billable work to permit them to devote the remainder of their time to pro bono representations and a wide range of training programs, including the firm’s signature professional development experience - the Howrey Academies. In Year One, associates will work with Howrey’s full-time, in-house writing instructor, be assigned to trial teams, and take advantage of other programs offered by Howrey’s award-winning professional development team. They will dedicate approximately one-third of their time to pro bono and public interest matters, which will afford them the opportunity to develop the advocacy skills and in court experience that are central to Howrey’s practice. The emphasis on training will continue into Year Two, with client secondments, judicial externships, and other advanced development opportunities added to the curriculum. Billable hours in the second year will be capped at roughly half of total hours.

That is the good, here is the salary information:

The Tier 1 program will be limited to a select number of associates each year. Compensation during the first two years will be adjusted to reflect the nature of the program and the dramatically reduced billable hours expectations. In addition to an annual salary of $100,000, first year participants will receive $25,000 upon acceptance of their job offer to help defray their law school loans or third year law school expenses. In their second year at the firm, participants will receive an annual salary of $125,000 and a $25,000 bonus upon successful completion of the program and entry into Tier 2 of Howrey’s associate development program. Higher compensation may be offered to candidates with special qualifications, such as advanced technical degrees or clerkships.

At least Howrey is trying. More details and the full memo and a reader poll after the jump.

In November, Howrey picked up 40 lawyers from Thelen, including former Thelen chairman Stephen O’Neal. Today, tipsters report that non-equity partners at Howrey are being asked to make capital contributions to the firm:

At Howrey the non-equity partners have been told they must make a … 10% capital contribution to the firm. This is a suggested minimum, the partners are being encouraged to contribute more.

We mentioned yesterday that firms that picked up Thelen lawyers have had a couple of bumps.

A Howrey spokesperson clarified our tipster’s report. But non-equity partners will be required to make their contribution by June 1st. A Howrey spokesperson characterized the new program as follows:

However, beginning June 1, 2009, Non-Equity partners will be asked to contribute capital, at a percentage far less than equity partners. Additionally, all partners, Equity and Non-Equity, will now able to contribute voluntary capital and several have already agreed to do so. All these are signs of their commitment and dedication to the Firm and its plans for growth.

This is reminiscent of the DLA Piper situation. Back in November, DLA asked its non-equity partners to kick in a capital contribution, in exchange for turning the contributing non-equity partners into equity partners. But it does look like Howrey is maintaining the distinction between non-equity and equity partners.

While Howrey contemplates the structure of its partnership, the structure of its staff is being downsized. Additional details after the jump.

Remember Lisa Loeb? She got married last week. She’s 40 and still wearing those funky glasses.

Unfortunately, she didn’t marry a lawyer, so she isn’t eligible to be one of finalists. Here they are (only two this week):

1. Emily Rubin and Daniel Feldman

2. Leah Yoon and Cyrus Frelinghuysen

Read more about these couples, after the jump.

The ATL inbox has been buzzing with layoff news about Howrey. Could it be that another firm that recently picked up a bunch of partners from a dissolved firm could be laying people off? Would former-Thelen chief Stephen O’Neal’s new firm cut associates so soon after his arrival?

Today, a firm spokesperson told us:

As we have stated on several occasions, unlike many firms, Howrey is not laying off lawyers or staff.

As in every year, there is an outplacement of some associates based on performance issues. This year, as in previous years, this involves approximately ten associates and occurs only after an exhaustive evaluation process and review. The information that you received is incorrect and has mischaracterized this as layoffs.

Howrey is enjoying a strong year. You should also note that unlike many other firms, we are not rescinding or delaying offers to first years. Our Associate Development program remains robust and on track.

After the jump … what does that mean exactly?

The Recorder is reporting that Howrey will take on 40 lawyers from Thelen’s prestigious San Francisco construction practice:

The group — which Howrey characterized as “most of the construction practice” from Thelen — includes Thelen Chairman Stephen O’Neal, construction practice head John Heisse II, D.C. office managing partner Andrew Ness, San Francisco partner David Buoncristiani (who handles matters for client Bechtel), Los Angeles partner Robert Thum and D.C. partner David Dekker. Most of the 18 partners and about 25 associates and of counsel are in San Francisco and D.C., and the rest are in New York and Los Angeles.

Hmm… Thelen attorneys, Chairman Stephen O’Neal, Howrey — where have I heard that before?

Oh yeah! You’ll remember that the Recorder initially broke the story on O’Neal’s flirtations with Howrey.

Immediately after Thelen dissolved, we mentioned possible options for the firm:

Option 1 is the plan they have arguably been pursuing: breaking up the firm practice group by practice group to interested parties. As we reported yesterday, this is the best option to save associate jobs. However, that plan is dependent on Thelen’s banks signing-off on the plan and maintaining their line of credit. Did Stephen O’Neal’s aggressive and ultimately public pursuit of his own lifeboat at Howrey scuttle that option? Once everybody is told that the managing partner could be leaving in ten days, why would other potential suitors compete for full Thelen practice groups? Instead, it’s easier to wait for an official dissolution and cherry-pick the rainmakers. This is what happened to Heller.

I’ll pause until the Thelen people stop screaming and hitting things.

Read about other Thelen landing places, after the jump.

The Vault 100 march continues! In this series of open threads, we list the firms, and you all discuss their upsides and downsides. We’ll be wrapping this puppy up this week.

Here are the next ten (with prestige scores in parentheses):

71. Nixon Peabody LLP (5.218)
72. Hunton & Williams LLP (5.208)
73. Perkins Coie LLP (5.119)
74. Reed Smith LLP (5.057)
75. Patton Boggs LLP (5.050)
76. Chadbourne & Parke LLP (4.997)
77. Bryan Cave LLP (4.969)
78. Thacher Proffitt & Wood LLP (4.967)
79. Howrey LLP (4.926)
80. Schulte Roth & Zabel LLP (4.910)

Usually, we have fun with the “notable perks” chosen by Vault. But as we move down the list, the perks are becoming distinctly less notable — e.g., gym membership discounts, free parking, and “good views.” Oh well.

You know what to do! Have at it in the comments.

Earlier: Vault 100 Open Threads - 2009

Coming soon to a theater near you: Howrey LLP: The Movie?

Late last week, several readers here in Washington reported unusual activity at the Howrey offices:

“Howrey is doing a film shoot in the lobby of its DC office… Multiracial attorneys in suits everywhere… Looks serious.”

“I was in the building where Howrey’s DC offices are today. There was some filming with a lot what seemed to be Howrey attorneys. At one point, a large group ran through some doors, talking on their cell phones. Hopefully, it’ll provide something entertaining to watch on YouTube….”

As long as they don’t take it down as soon as they put it up (or we link to it).

One tipster decided to do a little reporting:

“A few minutes ago, I walked through my building’s lobby to go out and get lunch. On the way, I was surprised to find the lobby lit up like a movie set. A few dozen young folks in suits — many of them holding cell phones — stood in a big group, listening to some guy shouting some directions. I chatted up the security guard at the front desk, who told me that Howrey was shooting a commercial.”

“From what I can tell, the whole scene will make for a fairly lame ad: ‘Hire Howrey — we stand around in suits, smiling and cell-phoning.’ Perhaps the worst-case scenario would be Howrey trying to play off of the Verizon cast-of-thousands ads….”

“On my way back, I noticed that they have stacks of life-sized photos of people up against the wall. Maybe they decided to replace their associates with cardboard stiffs? (Some would say that, at Howrey, they did that years ago.)”

We contacted Howrey for comment — about the filming, not the extent to which they staff matters with cardboard stiffs — but they did not get back to us.

That’s the question Andrew Ross Sorkin, the young star business reporter of the New York Times, tackles in his latest DealBook column. After describing the recent wave of bonus announcements, which fell into the typical pattern — one firm led, and everyone else mechanically followed, “as if [they] had simply copied and pasted the numbers directly from Cravath’s memo” — Ross Sorkin writes:

Lawyers are smart, but this herd mentality seems absolutely irrational, economically speaking — and not because the compensation is too high. The top law firms have been stuck in copycat mode for years. As soon as one of them raises salaries for associates, the others fall in line almost immediately.

At first glance, it makes sense in a free-market kind of way that law firms rush to match one another’s compensation packages. They have to compete for talent, especially for the annual crop of law school graduates. Indeed, if they never raised salaries or bonuses, they would probably be accused of conspiring to keep costs down.

But think about this for a moment: Is there any other business in which every competitor matches salaries and bonuses almost identically?

Good question. Nothing really comes to mind (with the exception of “highly unionized industries,” already noted in the article).

More excerpts and discussion, after the jump.

As you may recall from our prior coverage, in posts titled Howrey Is Planning Something Weird and More About the Howrey Weirdness, the law firm of Howrey LLP was planning to ditch lockstep compensation for its associates — in favor of something weird (or innovative, or both).

Starting in 2008, Howrey was going to employ a “competency model,” in which it would “determine salary based on individual evaluations and various forms of progress indicators.” At least that was the plan.

Consider the plan on hold, or at least put off for a while. Sources at Howrey advise us that at a meeting of the Associate Affairs Committee today, it was announced that the new, non-lockstep compensation system will not be implemented until at least 2009. In other words, Howrey will keep a lockstep pay scale through 2008.

It’s still planning to move in the direction of a new pay paradigm. The associate evaluation system upon which the new compensation will be based is going to be rolled out in 2008. But evaluations under that system won’t affect associate paychecks until 2009, at the earliest.

Why the postponement? A source tells us, “apparently the delayed implementation is a result of concerns voiced by associates to the firm’s outside consultants during focus group sessions about the new system.”

That’s nice. Who says partners don’t listen to associates?

Update: Or, as one commenter puts it, “they have been listening to those comments in exit interviews as Howrey hemorrhages associates who are terrified of a compensation structure based on an inadequate performance review system.”

Earlier: Nationwide Pay Raise Watch: More About the Howrey Weirdness
Nationwide Pay Raise Watch: Howrey Is Planning Something Weird

Back on Wednesday, we reported that Howrey LLP plans to chuck lockstep compensation for its associates. Starting in 2008, the firm will employ a “competency model,” in which it would “determine salary based on individual evaluations and various forms of progress indicators.”

Today our scoop was picked up by The Recorder (and then by the WSJ Law Blog). From The Recorder:

In a radical departure from the status quo, Howrey is getting rid of lockstep compensation for its associates….

While Howrey first-years will start at the market rate — the firm recently raised them to $160,000 — all other associates will advance through different levels based on personal evaluations instead of seniority. Each level has a salary range, and [partner Henry] Bunsow said top performers would be paid more than market, while some could make less.

“The goal is not to have associates make less than their counterparts at other firms,” Bunsow said. “If poor performers can get a better deal somewhere else, that may be a marketplace reality — we would hope that this system wouldn’t promote that.”

“The goal is not to have associates make less than their counterparts at other firms” — sounds a bit defensive, but whatever.

This system will be highly customized, but complicated:

The evaluations will be based on performance and experience, which could shorten the partnership track for some and lengthen it for others. Since Howrey is a litigation-focused firm, factors like writing, deposition, trial practice and client presentation skills will be considered, Bunsow said. Although there will be bonuses based on hours, that will be just one of many considerations in the evaluation, he added….

Associates will be assigned to partners who will be responsible for their development and their individual evaluations. A full-time staff person will be hired to oversee the program and to make sure that associates feel they are being treated fairly, Bunsow said.

Okay, we’re getting a headache. This sounds like the brainchild of a Soviet bureaucrat.

And this is just the simplified version. If you’re interested in the dirty details, an internal Howrey email — which includes mention of a “Competency Czar” — appears after the jump.

As associate salaries climb (further) into the stratosphere, will firms start experimenting with different compensation schemes? Is lockstep compensation for associates headed for the dustbin of history?

As we mentioned yesterday, Thelen Reid just moved to a two-tier system. And now we’re hearing that Howrey LLP may have something odd up its sleeve.

Today the firm had a meeting / conference call about compensation matters. Here are two reports:

“They are planning to adopt a sweeping salary change that amounts to ‘it depends.’ It seems that they will determine salary based on individual evaluations and various forms of progress indicators. Who knows what this means. They said that “market rate” is not the upper cap, and that all-stars could make more than market. This plan is basically final, but they will be speaking to people in focus groups to fine tune the policy.”

“Switching to a ‘competancy’ model as of 2008. First years at 160 but from there based on skills - some above and some below market. Details not released yet as focus groups will be used to fine tune the program.”

Interesting, albeit vague. We’re eager to see what results from this process.

Is Howrey adopting an innovative approach, one that will result in a more flexible and/or meritocratic associate compensation structure? Or is it just an attempt by the firm to get away with paying below-market salaries?

Two things we’ve heard recently (the first more definitive than the second):

1. Howrey LLP: Last week, they made a “secret announcement” — nothing in writing — of associate pay raises in Chicago, California, and Washington, DC.

2. Baker & McKenzie: In their Chicago office (and perhaps others), they sent around a memo similar to the Jenner & Block memo. It was basically “a non-committal memo, pledging to remain competitive, and acknowledging recent associate salary adjustments in the market.”

If you can provide us with more details, or have some associate pay raise news not previously reported herein, please drop us a line. Thanks.

Update: The Howrey raises have been announced, but not yet implemented. When they will take effect, and whether they will be made retroactive, is unclear.

We like your idea of drawing up a list of major law firms that have not (yet) joined in the latest round of associate pay raises.

Such lists have been floating around in the comments over the past few weeks. But we thought we’d try and prepare an “official” LIST OF SHAME.

Law students, law clerks, and potential lateral associates:

When thinking about whether or not to accept an offer from a particular Biglaw shop, consider whether they appear on the List of Shame — along with all the non-compensation-related variables that should be considered when choosing a firm.

But do hold their presence on the List of Shame against them. That’s why we call it the List of Shame!

After the jump, our stab at a List of Shame.