Howrey law firm was once a litigation powerhouse but the firm, which closed in March, is now facing litigation itself as around 60 of the firm’s former lawyers combine to fight compensation claims arising from its bankruptcy.
The WSJ Law blog reports that the attorneys—former contract attorneys and non-equity partners—have joined forces to protect themselves from potential lawsuits to recover the compensation they received before the law firm’s demise and subsequent bankruptcy filing last year.
The attorneys, who once populated Howrey’s intellectual property, litigation and other practices and now work at such firms as Cooley and Greenberg Traurig, have hired the San Francisco law firm of Dumas & Clark to represent them in “protecting and advancing certain common interests and issues in lawsuits, claims, and proceedings that are or may potentially be alleged or asserted by or against members of the group,” according to a filing Friday in the U.S. Bankruptcy Court in San Francisco.
The trustee running Howrey’s liquidation, Allan Diamond, said he may sue Howrey’s former partners to recover compensation paid out of the law firm’s alleged profits. The trustee can sue to recover, or claw back, the money on the grounds that the firm wasn’t profitable but was instead insolvent and unable to pay its other obligations as they came due.