In the end it would take Howrey CEO, managing partner, and chair Robert Ruyak two tries to deliver the bad news to his partners.

Inside a conference center in suburban Virginia on the afternoon of November 12, 2010, Ruyak was facing questions about the firm’s relationship with its primary lender, Citibank, N.A. The annual leadership meeting, which roughly 50 partners attended, was an especially urgent one, as it had become apparent that the firm was about to post poor results for a second year.

Ruyak, a silver-haired, 61-year-old trial lawyer who had steered Howrey for over a decade, assured partners that the firm’s relationship with Citibank was fine, and he brushed off concerns about the firm’s debt. But during a break, the firm’s general counsel, Roger Klein, and CFO, Patrick Hennessy, took several senior partners aside. The two said that Ruyak had not accurately portrayed the gravity of the firm’s banking situation, according to partners at that impromptu meeting.

After the break, Ruyak returned to the podium. This time, under more pointed questioning, Ruyak said that in fact the firm’s relationship with Citibank had soured. The firm might not be able to pay back the $25 million outstanding on its credit line by the end of the year, potentially busting a covenant. The bank was also upset about partner overdraws that had occurred a year earlier, which had not yet been fully repaid. Many partners would not get a draw in December.

The news that the firm would likely bust a bank covenant “just sucked all the air out of the room,” recalls William Rooklidge, then the IP practice group cohead. “Everybody looked at each other and said, ‘Whoa, the only firms that ever happened to were Brobeck and Heller,’ ” says Rooklidge. “ A lot of people were just physically sickened.”

The new information, which Citi declined to confirm, proved to be a tipping point for the firm. “Instead of going back and billing and making phone calls, a certain paralysis set in,” says Sean Boland, Howrey’s vice-chair for finance. Ultimately, the firm’s collections fell far short of Ruyak’s target. Within weeks, three of the firm’s most important partners outside of Washington, D.C.–IP trial heavyweight and vice-chair Henry Bunsow; antitrust global cohead Trevor Soames; and global litigation cochair Gary Bendinger–would exit, triggering a further slide in confidence. In the next four months, as the trickle of departures became a flood, the firm saw its options dwindle. No longer able to remain independent, Howrey’s leaders sought a merger with Winston & Strawn, but settled for a complicated set of partner moves to Winston instead. On March 9, with only the Washington, D.C., and Houston offices still largely intact, Howrey’s remaining partners voted 149 to 1 to dissolve the firm. Howrey, the IP and antitrust powerhouse, was no more.

How had the firm that boasted that it was “in court every day,” the firm that offered clients “the advantage of focus,” lost its way? How had Ruyak, named one of 20 “Visionaries” in 2008 and 2009 by our sibling publication Legal Times, stumbled so badly? To answer those questions, The American Lawyer interviewed 25 former partners, members of management, and outside consultants. Many spoke on the record.

The proximate cause of Howrey’s collapse was that its partners, by the score, lost confidence in management’s ability to address the firm’s fundamental problems. They had ample reason to be discouraged. Instead of significantly cutting its unproductive ranks in 2008 and 2009, as many of its rivals had done, Ruyak, with little oversight, took on more laterals, increasing partner head count by 8 percent, and more risk, more than doubling the firm’s investment in contingency cases. As Ruyak continued to deliver rosy messages about Howrey’s performance, partners claimed that they remained mostly in the dark about the firm’s growing financial difficulties. “I don’t think [Ruyak] intentionally misled anyone,” says one longtime Howrey antitrust partner in Washington, D.C., echoed by several others. “Bob is a trial lawyer, and he sees everything through his prism. And he believes very deeply in it.”

Howrey’s failure, however, was not Ruyak’s alone. Members of the firm who were in a position to see the problems–executive committee members and practice group leaders—share the blame for failing to ask questions or to take responsibility. When the going got tough, several fled. And by the time the partnership was roused to action, it was too late.

In its 55 years in existence, Howrey had survived other close calls. Founded by a former Federal Trade Commission chair named Jack Howrey and three other top D.C. lawyers as the city’s first exclusively antitrust shop, the firm, then called Howrey Simon Baker & Murchison, was a success from its first days. But in 1982, President Ronald Reagan gutted antitrust enforcement; the immediate result was that two huge shared-monopoly suits against Howrey clients–major oil companies and major cereal companies—were withdrawn. Those cases had kept a third of the firm busy for years. “Suddenly nobody had anything to do,” notes John Briggs, a Howrey antitrust lawyer from 1973 to 2008. “The firm was thought to be on the edge of collapse.”

Over the next year, then-head Harold “Hal” Baker retooled the firm’s mission toward broader complex trial work. But Howrey’s attorney head count plunged, from 130 to 90. In 1983, to stem the losses, Baker and cofounder William Simon convinced the ten most highly compensated partners to take a steep pay cut in order to guarantee compensation for the rest of the partnership. “That bought a decade and a half of loyalty” from the junior partners, Briggs says. “We would have walked over hot coals for those guys.”

Howrey was a place where the lawyers really seemed to be harder- working and scrappier than their peers at older, more established firms. “Howrey was the Avis of trial firms, the ‘we try harder’ firm,” says litigator Joel Chefitz, the firm’s Chicago managing partner from 2002 until his departure in early 2007. “Most of the senior guys didn’t have big pedigrees. They were just lawyers who were incredibly smart, and who had worked their way up to where they were recognized as stellar in the marketplace. And they knew it.”

Each of Howrey’s leaders in turn expanded the firm’s mission. Ralph Savarese, succeeding Baker in 1985, engineered a transformational merger with the 120-lawyer Houston-based IP boutique Arnold, White & Durkee in early 2000, thereby establishing Howrey as an IP force nationally; then he beefed up the antitrust group, acquiring Collier, Shannon, Rill & Scott’s antitrust group in April of the same year. Savarese also spearheaded an ad campaign; the firm’s most catchy taglines, “In Court Every Day,” and “The Human Side of Genius,” date from Savarese’s era.

In January 2000, Ruyak, then 50, was selected as managing partner and CEO by the six-member executive committee; he would soon take on the chair title as well. Ruyak was the epitome of the Howrey trial lawyer: In his most celebrated case in 1993, he won a $500 million jury verdict, sustained on appeal, for The LTV Corporation and Wheeling-Pittsburgh Steel Corporation in a multidistrict antitrust claim.

Ruyak, in Savarese’s mold, saw himself as a transformational leader, say those who knew him well. His mission was nothing less than to make Howrey the global brand for IP, antitrust, and litigation. He preached a strategy of constant growth. And like Savarese, Ruyak poured millions of dollars into branding efforts. He also was responsible for other innovations, particularly in associate training and compensation.

Ruyak acted quickly to make his imprint. Between 2001 and 2003, during the dot-com bust, he grew head count by 10 percent, opening offices in London, Chicago, and Brussels, and recruiting insurance recovery and commercial trial practice groups. “While other major law firms nationwide are laying off associates, we are hiring and promoting,” Ruyak boasted in a late 2001 press release. “Howrey’s plan—to maintain stable, defined practice groups while growing worldwide—has allowed us to weather this current downturn.”

The stable, defined practice groups were widely praised for being top-notch, with both IP and antitrust lawyers winning international recognition nearly every year. And for a while, Ruyak’s growth strategy also seemed to succeed. The firm’s profitability surged: Profits per equity partner doubled from $575,000 in 1999 to $1.2 million in 2006. Brussels, in particular, was an antitrust success, led by a very entrepreneurial lateral hire, Trevor Soames. Brussels “was able to offer something unique that a lawyer sitting in New York or Los Angeles would need in dealing with the [European Union],” says Chefitz.

But as Howrey took on a lot of laterals and spread geographically, a few fundamentals were lost: the firm’s vaunted focus and its cultural “glue.” There were too many new offices, too many new partners, and, too often, insufficient attention to integrating them. “Howrey’s thing was that you made your own way,” says Richard Ripley, a former D.C. litigation partner who had been involved in recruitment.

Howrey was never a democracy. Though the firm’s partnership agreement called for a majority partner vote to approve the executive committee slate, in practice the first vote many Howrey partners ever made was the vote on the firm’s dissolution, according to several partners. “It was not a consensus-built structure,” notes Peter Zeughauser, who was retained by Ruyak as an outside management consultant beginning in 2000. (Zeughauser is a contributing editor to The American Lawyer. )

The only other body with any power was the executive committee, which was charged with approving major new investments. Historically, Howrey always had a proactive committee that included the firm’s most valuable partners. Its members selected the firm’s leader, acted as a check on his power, and helped create implicit partner “buy-in” for big firm projects.

But the committee lost its most powerful voices in 2007 and 2008, when vice-chairs Mark Wegener and Cecilia Gonzalez withdrew from active management because of illness; both ultimately died of cancer. Wegener and Gonzalez, two of the biggest rainmakers, provided a critical sounding board for Ruyak, reining in some of his more extreme ideas and dealing with the nuts and bolts of billing and collection. Without Wegener and Gonzalez, Ruyak increasingly looked to his handpicked administrators and outside consultants for advice. “Everybody sort of felt that Bob was operating in isolation,” recalls one senior partner, a sentiment shared by several others. The new executive committee was much more passive. Typically, say two former members, they would receive the monthly agenda from Ruyak the moment the meeting started, sometimes with lengthy spreadsheets attached; Ruyak would give a brief presentation, and the firm’s CFO would remain silent. “There was never an opportunity to digest the information,” notes one member. Still, says Zeughauser, “no one ever put their foot down to ask for more and earlier information.”

At the firm’s annual retreat in early April 2008, Ruyak gave each partner a pamphlet with the unintentionally prescient title “Our Iceberg Is Melting,” a fable about a penguin colony in Antarctica. The point, say partners, was to emphasize the need to always be aware of your surroundings so you know what’s coming. Ruyak also passed out a self-congratulatory 17-page white paper he had authored, “Howrey: Succeeding Against All Odds.” “From the beginning,” he wrote, “observers and competitors alike gave us very low odds of success—betting against us and our strategy. They were wrong.” Ruyak’s goal: “to become the undisputed premier litigation firm worldwide. Not to be number one among equals . . . not winning by a nose; but clearly number one with several furlongs between us and whomever is number two.” The firm, he noted, had doubled in size in the past eight years; was financially sound; and was in the top third of The Am Law 100 by size, and top quarter by financial results.

In fact, The Am Law 100 data for fiscal year 2007 ranked Howrey in the bottom half in head count (fifty-first); gross revenue (fifty-ninth, down slightly from the previous year); and in profits per equity partner (sixtieth, down from forty-first the previous year). More importantly, Howrey’s business was not as sound as Ruyak had described it. Lawyers had worked on average 100 fewer hours in 2007 than a year earlier. The referrals Howrey had historically received from other firms were drying up. Concurrently, patent litigation, which had been consistently profitable, suddenly went into decline as companies looking for spending cuts pulled the plug on discretionary litigation. And some major clients couldn’t pay their bills, Ruyak notes. “To blame the collapse of Howrey on the recession is like blaming gravity for a plane crash,” says Martin Cunniff, a litigation partner now on the firm’s dissolution committee. “It was a perfect storm.”

Remarkably, many attorneys, including both senior partners and new laterals, say they were unaware of the weakening fundamentals. Asked repeatedly, these partners say they don’t recall seeing data about the decline in average hours. It was likely, however, that they simply weren’t paying attention. Zeughauser, who attended all but one annual retreat over the past ten years, says that, if anything, Ruyak put too much data before the partners, racing through PowerPoint slides in a 30-minute presentation. Ruyak says he also distributed monthly data on average partner and associate hours.

Part of the reason that data may have been overlooked was that Ruyak repeatedly downplayed problems, telling partners not to worry. He also emphasized gross demand, which appeared level or grew steadily from year to year. That data, however, didn’t tell the full picture, because steady lateral growth inflated overall hours. To the extent the downward trajectory in productivity was mentioned, Ruyak minimized its significance, many partners say.

The next year, 2008, work declined again by another 100 hours per lawyer, to 1,633. But at the annual retreat the following April, Ruyak was as upbeat as ever. The firm had won a $36 million windfall in a 13-year contingency case for Fifth Third Bank of Western Ohio, lifting profits per partner to a record $1.3 million. He congratulated partners on the firm’s performance. Ruyak “used the contingency money to smooth out the revenues,” says Bunsow, “and covered up a continuing decline in the fundamental performance of the firm.”

Ruyak denies covering up any bad news. “The executive committee, including me, clearly recognized the impact of the recession, constant pressure from clients on rates and hours, and the fact that we were not replacing concluded cases with new ones as rapidly as in the past,” he says.

As demand went into a slump, management’s interest in and appetite for risk grew. Historically, the firm had handled a few plaintiffs-side antitrust contingency cases, but the investments were modest in size and in risk. In early 2007, Ruyak, in consultation with a committee that evaluated new contingency matters, decided to take on a major new case: a claim on behalf of a putative class of dairy farmers who alleged that they had been forced to accept artificially low milk prices from distributors. Ruyak assigned the matter to Robert Abrams, the firm’s global litigation cochair and a Howrey lifer, whose 11-partner team had been left largely idle since a key client, Caterpillar, Inc., had concluded a major litigation. By 2009 and 2010, the firm had poured tens of millions of dollars’ worth of unpaid lawyer time into the milk case. Some partners say they were worried about the number of senior partners assigned to the case. “We don’t litigate [contingency cases] like plaintiffs normally do,” says Ripley. “We litigate like defense lawyers. We build a Cadillac of a case.”

The milk matter was just one of a growing number of such commitments. In January 2009 the firm became lead plaintiffs counsel in a price-fixing class action filed on behalf of DVD renters against Wal-Mart Stores, Inc., and Netflix, Inc.; that case, led by the same Abrams team, was absorbing millions of dollars more in attorney time by 2010. Howrey was also spearheading another pure contingency class action against the U.S. government on behalf of Hispanic farmers who alleged that the U.S. Department of Agriculture had discriminated against them in loan programs. (All three matters remained ongoing at press time.)

The partnership’s contingency investments grew from a historic 3–5 percent of work to 8 percent in 2009, and finally to 11–12 percent in 2010. “That’s a huge investment” by the partnership, says the firm’s insolvency attorney, Peter Gilhuly of Latham & Watkins. “And the investment amounts were growing and growing.”

There was more. In 2009 and 2010, as clients threatened to pull back on large matters, senior partners were permitted to extend discounts to retain their business or, in some matters, switched from hourly rates to contingency or partial contingency fees. This practice was especially rampant in IP, say several partners formerly in management. Additionally, regular across-the-board 12–15 percent discounts were routinely given to the firm’s largest clients, several senior practice group heads say. During the recession, “it became a culture of discounting,” says one management insider. “It was out of control.”

“Sometimes budgets weren’t honored,” Ruyak responds. “In retrospect, could we have managed [our contingency matters] better? Yes.”

Meanwhile, Ruyak was making other investments. At the peak of the recession, he took in two large groups with their own troubled histories. In November 2008 he brought over the former chairman and 39 other construction litigators from the failed Thelen firm; in July 2009, he brought in the 26-lawyer Silicon Valley IP boutique Day Casebeer Madrid & Batchelder, which had just suffered a hit reputationally and laid off a fifth of its partners. Remarkably, Ruyak limited the investment of both groups in the milk and Netflix cases in 2009.

In 2009, for a third consecutive year, hours per lawyer dropped by another 100, to under 1,500. This time around, there was no contingency windfall to cover the revenue hole. Nor were there warning bells in Ruyak’s e-mailed communications; he projected that the firm would come in at 90 percent of budget. As late as December 24, Ruyak sent an e-mail to partners indicating that collections were on track. “What he should have said,” says Soames, then the global antitrust cohead, “was, ‘Get your bloody running boots on and get the money, because we’re behind.’ “

Just after New Year’s 2010, partners were shocked to learn that the 2009 results had been disastrous, and that they would only receive two-thirds of budgeted compensation. The poor 2009 showing caused a near rebellion. Senior partners in Europe, say several, were livid. Brussels had just had its best year ever. The founder and head of the European IP practice, Willem Hoyng, abruptly resigned from the executive committee; within six months, he would take nearly the entire European IP practice and leave the firm.

Senior partners and practice group heads rushed to Washington to meet with the executive committee to formulate a plan to stop the slide. During 2010, the same group would meet monthly. The activist partners included, most prominently, Boland, Soames, Bunsow, Bendinger, and a young antitrust partner and executive committee member, John Taladay. Boland and Bunsow were appointed co–vice-chairs. The group called for a top-to-bottom restructuring; in early spring they began to push people out. In the next seven months, some 60 partners left, most from the global litigation department.

In late March, partners sustained another shock: They had been overpaid in the previous year’s distributions to cover taxes, Ruyak informed them. For most partners, the amount owed was less than $100,000. But Ruyak told partners that the overdraws could be covered by the expected contingency fees. He was wrong.

As the year progressed, some partners grew impatient. Ruyak dragged his heels in executing plans, according to several partners. “Bob’s position was that we were cutting too far, and that the cuts proposed would make it impossible to accommodate an upturn in demand,” says Soames. Ruyak also declined to push out a handful of partners—whom he was close to—that other partners identified as underperforming. But Ruyak and Boland say that practice group heads, particularly in the bloated IP and global litigation ranks, also share the blame. “I did not act independently,” says Ruyak. “The practice group heads were the first line on those [firing] decisions.”

Ruyak’s status as leader, however, was never challenged. “There were no great alternatives who could bring consensus to the firm,” says Bunsow.

Among the few who could have was Boland, an antitrust rainmaker who came to Howrey from Collier, Shannon a decade before. Boland “was really one who tried to turn the firm around,” says Soames. “Had he taken control in the beginning of 2010, he was one person who had the force and personal credibility to do things that were necessary.”

But Boland, who was already guiding the 160-lawyer antitrust group and doing a lot of client work, was reluctant to take on more management duties. “I know there was a lot of frustration with [Ruyak],” Boland says. “But I told people, you can make things a lot worse and make the banks nervous. And I wasn’t going to take a job that I couldn’t perform well.”

Despite the restructuring effort, by the fall of 2010, things weren’t getting better. Partners were looking at a fourth straight year of declines in demand. Frustration came to a head at a three-day meeting in November of firm leaders, including some midlevel partners who, while pledging loyalty to Howrey, wanted Boland to lead the firm with Ruyak and to expand the executive committee.

On the third day, the group discussed the midlevels’ proposed management changes, but their action plan was a nonstarter. Several key partners appeared to have lost patience. “This is all very interesting, but if we don’t discuss a business plan for 2011,” said Soames, interrupting the management discussion, “this will be the last meeting I will be attending.” Within a day, Soames would resign his position as global antitrust cochair; he would ultimately leave with his core group in February.

Bendinger also spoke out, according to several accounts. “Shame on us, shame on us, if we are not able to turn this talented group of lawyers back into a highly profitable and successful firm,” he reportedly told the group. Within the month, Bendinger would also be gone. (Bendinger did not respond to a request for comment for this story.)

Later that day, Ruyak rose to present his business plan and reassured partners under questioning that the firm continued to have a good working relationship with its primary lender, Citibank. But during a scheduled break, the firm’s general counsel and the CFO took several senior partners aside. Ruyak, they said, had failed to accurately portray the firm’s deteriorating relationship with the bank, or to mention that the firm was unlikely to be able to pay its way out of its credit line by the end of the year as required. “I’ve seen this sort of scenario before,” Stephen O’Neal, the former chair of Thelen when it failed, told the small gathering. “That’s the sort of thing the banks did for us, and if the banks are not satisfied, it’s going to end the same way.”

After the break, Ruyak returned to the podium. Under pointed questioning by Bunsow and others, Ruyak said that the firm was, in fact, likely to breach a loan covenant with Citibank. And to show that it was making efforts to keep its financial house in order, Howrey would now require partners who owed the firm money to pay back the overdraws from 2009 within the next few weeks.

Trying to defuse growing anger and panic, Boland told the group that the debt situation wasn’t the end of the world. The problem was short-term, and would go away if partners brought collections in. Howrey could still reach 75 percent of its $1 million profits per partner target. With nearly $30 million in restructuring costs now behind it, and large fees expected in two huge contingency antitrust claims, 2011 could be a far better year. Partners just needed to be patient.

Boland says his colleagues’ obsession with the debt issue was indicative of a broader weakness in the partnership. “We were not a firm that had a corporate department. We were basically a bunch of litigators,” he notes, so “there was not a level of sophistication about these issues.”

In the end, collections came in $20 million short of the 75 percent best-case scenario, and the bank agreed to convert the balance on the credit line to a longer-term loan. Boland says that a future for a stand-alone Howrey was still possible: As of January 1, 2011, the firm had more than $100 million worth of accounts receivable and work in progress.

Behind the scenes, however, Boland and Ruyak were already at work on a Plan B: a merger. In late October, Zeug­hauser had given Ruyak a handwritten list of roughly ten candidates. One, Winston & Strawn, had already expressed interest. Ruyak, a longtime admirer and acquaintance of its chair, Dan Webb, immediately seized on Winston. Boland knew Winston’s Washington, D.C., litigation head, Thomas Buchanan, well.

Just before Thanksgiving, Zeughauser set up a dinner at the members-only City Club of Washington for Ruyak, Boland, Webb, and Winston managing partner Thomas Fitzgerald. Enthusiasm was high on both sides. Boland and Ruyak liked Winston’s strong management and sterling litigation brand. Winston, for its part, particularly coveted Howrey’s antitrust and IP groups. The latter’s deep bench of lawyers with advanced hard-science degrees complemented its own soft IP practice.

At the first meeting, however, it became clear that conflicts would be an issue. Winston represented generic pharmaceutical makers; Howrey, name-brand drug companies—two sides of the same industry constantly at war with each other. When extensive client lists were exchanged in early December, approximately a dozen direct client conflicts became apparent. And, ominously, Winston had a client on the opposite side of Howrey’s plaintiffs in the giant milk antitrust class action.

On January 4 the five met again with Winston management for preliminary discussions; this time they were joined by Howrey CFO Hennessy and IP cochair Rooklidge. Unbeknownst to Rooklidge, an e-mail about the Winston talks had been accidentally copied that day to the entire Houston office, and from there to the rest of the firm. Passing through Howrey’s Chicago office after the talks, Rooklidge was caught by surprise when three partners collared him in the hallway to ask about the potential deal. “There was a lot of optimism in Chicago,” he says. “Winston was viewed in a very positive light.”

But that optimism quickly faded amid delays, mixed messages, and hurt feelings. The milk case was a huge stumbling block. Winston wouldn’t proceed with serious merger talks until the two firms obtained consent from their clients and from federal district court judge J. Ronnie Greer, who was overseeing the case. To get that consent, either Abrams’s entire milk group, or the Winston partner whose client was a defendant, had to agree to withdraw from the representation, or to exclude themselves from any potential merger. The Winston partner couldn’t obtain client consent to withdraw. Instead, Abrams and his group, all Howrey “lifers,” were asked to remove themselves from any talks with Winston. If the merger went through, they would have to find another firm. That decision “proved a huge tear in the cultural fabric of the firm,” says one insider. Abrams, though upset, obtained the sign-offs from 14 class representatives by January 20, removing a major obstacle. But it took Winston another three weeks, until February 12, to get its client’s consent for the talks.

Another blow was the departure of Henry Bunsow. On January 18 Bunsow announced his move to Dewey & LeBoeuf. The recruiter for the move was Bobbie McMorrow, the wife and business partner of former Howrey chair Ralph Savarese. The departure of the former vice-chair “was a really big deal,” Rooklidge says, echoing several others. Twenty-four hours later, Rooklidge learned that the non–IP half of his office, led by Robert Gooding and Scott Garner, had resigned. When he arrived at his office, “people were just lined up at my door saying, you either lead us out of here as a group or we’re scattering.” At roughly the same time, partners began departing en masse from Brussels, East Palo Alto, and San Francisco.

By then, Winston was no longer pursuing a merger but planned to make individual offers to four groups: global antitrust; the Washington, D.C., IP practice; the entire Houston office; and global litigation. In late January it extended conditional offers to 150 of the firm’s roughly 200 remaining partners; actual offers depended on the resolution of potential conflicts. Critically, offers could be rescinded within each group if a handful of key partners declined. Ruyak announced that he would not join Winston, but would remain at Howrey to look after the interests of the remaining lawyers.

Through February, the process moved painfully slowly. “I was shocked at how difficult it was to put out offers [to Howrey partners]. It took forever,” recalls Gilhuly, Howrey’s insolvency lawyer, who pushed Winston to speed up the process.

Winston’s managing partner says his firm was moving as fast as it could. “We had to deal with all of [the conflicts],” Fitzgerald says. “And we were killing ourselves.”

One of the lawyers who slipped out of Winston’s grasp during that time frame was Rooklidge. It had become clear that Winston was not interested in an Irvine office and that Rooklidge would have to move. In mid-February, he took a small group to Jones Day. “I really loved the people I worked with,” says Rooklidge. “I wanted to hold the practice group together, and I wanted to hold the firm together. But at some point, it became apparent that I couldn’t do that.”

Meanwhile, things were going badly for Winston’s plans in Washington. The firm wanted the Howrey antitrust group. One of the group’s linchpin partners, John Taladay, wanted to keep the Howrey name, a famous antitrust brand. But Winston stumbled over professional conduct rules that appeared to permit the transfer of a deceased partner’s name only if the new firm was regarded as a successor. Winston wasn’t, and though Fitzgerald promised to study the issue, a name transfer looked increasingly unlikely. Then, at the last minute, Winston withdrew its preliminary offer to a close colleague of Boland’s, William Henry, after Henry was unable to get the extremely broad waiver Winston had demanded from pharma giant Merck & Co., Inc. (Henry, a senior partner, had shepherded Merck through an antitrust review in its 2009 acquisition of Schering-Plough Corporation.) On March 7, after a week when Boland was widely rumored to be wavering, he abruptly resigned from the firm and informed Fitzgerald that the antitrust group would not be joining Winston. In mid-March, he took 45 lawyers to Baker Botts, including Taladay and Henry.

Ultimately, Winston extended 81 offers and took approximately half that many Howrey partners–including the Houston office and a handful of Washington, D.C., IP partners. “There’s nothing we did wrong, or they did wrong,” says Winston’s Fitzgerald. “Our goal was to get it right, and to do it according to the ethical rules as we saw them.”

The collapse of Howrey was a failure of leadership and a failure of partnership. Ruyak clung to his strategic vision long after it had failed. He didn’t level with his partners. And, in the face of serious conflicts with Winston, he failed to seek other merger possibilities. He went down with his “iceberg” and took the firm he devoted his career to with him. But his partners carry blame here as well. They were owners, not serfs, and they failed to seek information despite growing doubts–and failed to act quickly once warning signs became clear. A firm that prided itself on its distinctive culture came to rely on a disproportionate number of lateral partners to try to steer it. What happened at Howrey “was in no small part attributable to a number of leaders not owning responsibility and, indeed, walking away from their partners when they needed them most,” says Zeughauser, the consultant. Those leaders, all Ruyak-era laterals who had been put in trusted positions, “often had legitimate complaints, but . . . instead of doing the heavy lifting, they walked away.”

Ruyak concedes that he “probably” could have been more aggressive in cutting back Howrey’s ranks of idle partners, but says he believes the firm had already slimmed down enough to stabilize in 2011 had key partners simply buckled down. “The longer-term Howrey people realized that our profitability jumped around a lot,” Ruyak says. “The people who were laterals, maybe, did not.”

“If people lose confidence,” he continues, “then it becomes very difficult. Let’s face it–we had an enormous amount of talented people, and other firms wanted them.”

In retrospect, what may be most surprising about the firm’s demise is how many partners stayed as long as they did. It was only when profits fell for a second year running that partners with big books of business began leaving. But again and again, Howrey lawyers say they desperately didn’t want to leave. “When you go to trials with people,” says Cunniff, “it’s like going into combat. You just develop really strong bonds.”

One Howrey lifer who stuck it out until nearly the end says she loved her group, and was doing “the most interesting work that you could do in antitrust. We were busy, and we didn’t think much about the big picture,” she says. “You’re expecting somebody to manage the firm. They’re standing up there saying, ‘Yes, there’s some rough riding going on, but don’t worry about it.’ In 20/20 hindsight, I should have been less surprised.”