Howrey restructuring set to hit 10% of global partnership

Howrey is set to cut up to 10% of its partnership over the coming months in the wake of a 35% drop in profits per equity partner (PEP) during 2009.

Between 25 and 30 partners are expected to leave Howrey over the next few months as part of the restructuring, with the majority of the cuts set to fall in the US. Up to three partners are expected to leave across the firm's European offices.

The Washington firm decided on the cuts before Christmas following a review of its business carried out towards the end of last year.

The cuts, which will affect both equity and non-equity partners, equate to between 8% and 10% of Howrey's partnership as it stood at the end of the 2009 calendar year. At that point the Washington DC-based firm had 152 equity partners and a further 149 non-equity partners.

Howrey maintains that the cuts will not be based purely on partner performance but will focus on practice areas and geographies the firm believes do not fit with its core business of antitrust, global litigation and intellectual property law.

Although the firm would not confirm the expected breakdown of the job losses, broad areas that an internal review found were at odds with its core strategy include trademark prosecution and international arbitration. It will continue to expand in other areas.

It is understood that all affected partners have been told, with Howrey stressing that it is working closely with them to try to find new positions through outplacement programmes. It expects the process to have concluded by the end of this autumn.

Howrey posted a 35% drop in partner profits during 2009, falling from $1.3m (£876,000) in 2008 to $846,000 (£564,000) last year. Revenues also saw a double digit dip, dropping 16% from $573m (£382m) to $480m (£320m) in 2009.

Robert Ruyak, Howrey's managing partner and chief executive, said: "After an internal assessment we decided that we need to tighten up and be strong by focusing on our core areas. We added a number of partners laterally during the last part of 2009 and thus far in 2010, while a similar number are departing for firms and practices that should be a better fit for them. We do not expect the partnership to be substantially different in size by the end of the year to what it is now."

Last month Howrey announced that it was cutting 29 associates and 65 staff from its 10 US offices.

This week (8 March) saw the departure of international arbitrator Melanie Willems from the firm's London office. Willems joined Chadbourne & Parke with with her team of associates, leaving Howrey with no practice in the City. Her departure leaves the firm with eight partners in London.

Despite the cuts the firm has not shied away form making significant acquisitions. Last year saw Howrey launch an antitrust practice in Paris with the hire of a six-strong team from Clifford Chance.

Earlier this year the firm hired highly regarded competition partner Shaun Goodman from elite US firm Cleary Gottlieb Steen & Hamilton in the City.

Additional reporting by Sofia Lind.

More US news, comment and analysis