February 18, 2011
THE DAILY JOURNAL
By Sara Randazzo and Craig Anderson
As the unraveling of Howrey LLP continues, it looks like a majority of partners in the firm’s four California offices won’t be headed to Winston & Strawn LLP, which made offers to 75 percent of the partnership earlier this month.
Firmwide, 70 percent of Howrey partners who received Winston offers have accepted them, a former Howrey partner said Thursday, but that percentage drops precipitously outside of Howrey’s Washington, D.C. and Houston offices. Winston initially set a 21-day acceptance deadline that falls this weekend, but a person familiar with the situation said no hard action will take place until closer to Feb. 28.
Irreparable conflicts and competing offers prevented many California partners from joining Winston.
Two more East Palo Alto partners found new firms this week – intellectual property attorney James R. Batchelder, who is going to Ropes & Gray LLP, and life sciences patent attorney Viola T. Kung, who is decamping for Perkins Coie LLP. Kung confirmed hers and Batchelder’s moves on Thursday, and said her decision to leave was prompted by recruiters Larry Watanabe and Stacey Pacelli, who approached her with the idea of taking her practice elsewhere.
Batchelder and attorneys at Ropes & Gray could not be reached for comment.
The moves follow Tuesday’s news that seven construction litigators led by Stephen V. O’Neal left for Jones Day’s San Francisco office.
With the notable exception of the Los Angeles office, Howrey’s California locations are a shadow of what they once were. Irvine will soon count no more than two partners. Several in that office have left for Morgan, Lewis & Bockius LLP – including Robert E. Gooding Jr., former co-chair of Howrey’s securities litigation group – or for Jones Day, which grabbed intellectual property heavyweight William C. Rooklidge and three others.
San Francisco still houses seven partners, and East Palo Alto has nine partners.
Los Angeles stands at 20 partners, with no significant departures in recent weeks.
Sources say several factors make Los Angeles different than the others.
A large chunk of the office thrives on insurance recovery work led by practice chair David W. Steuber, work that pits them against major insurance companies, many of whom Winston counts as clients.
At least three Los Angeles partners, Joanne E. Caruso, Joanne Lichtman and Michael J. McGaughey, are said to be conflicted out of the Winston deal because of their work on a major milk industry antitrust class action in the Eastern District of Tennessee led by Washington, D.C.-based Howrey partner Robert G. Abrams. That case has Winston and Howrey attorneys on opposite sides. Caruso, Lichtman and McGaughey could not be reached for comment Thursday.
New conflicts continued to emerge after Winston made the offers, one former partner said, because Winston initially looked only at Howrey’s top 100 clients. The former partner said that as many as 50 of the 140 partners invited to join Winston could have been affected.
Conflicts have also made it difficult for some intellectual property litigators. One of Howrey’s biggest rainmakers, Lloyd R. “Rusty” Day Jr., represents biotechnogy company Amgen Inc., which often battles it out in court with generic drugmakers. Winston & Strawn represents a number of generic drug manufacturers.
One of Day’s East Palo Alto-based colleagues at Howrey, Robert M. Galvin, recently left to join Wilmer Cutler Pickering Hale and Dorr LLP. The fate of Day and several other Howrey attorneys who represent Amgen is uncertain.
Several sources said that the lack of departures from the Los Angeles office could also be attributed to that office traditionally having more service partners than rainmakers.
“I’m not sure about the portability of the business of the rest of that office,” Mestel & Co. recruiter Lyndon Parker said, referring to those not involved in the insurance recovery or milk antitrust suit. “There’s some white collar, some IP, some commercial litigation.”
Sources speculate that there could still be some talent for Winston to grab in the state. The Chicago-based firm currently has 135 attorneys spread between Los Angeles and San Francisco.
Once Winston absorbs partners, sources say offers to associates and staff will follow. What happens to those who don’t join, and to Howrey’s debt and lease obligations, is a complex question few know the answer to.
As Parker put in, “It’s a guessing game right now.”
Added an East Palo Alto-based Howrey partner who asked not to be identified:
“It’s a fluid situation. I don’t expect the situation to clarify over the holiday weekend.”