In January 2008, Howrey went looking for a loan. Like most of the biggest firms, Howrey relies on short-term credit lines in the initial months of the year, when collections are low, to pay associates, staffers and other expenses until clients pay their bills.
Howrey felt intimations of the coming recession, so the firm asked Citigroup Inc. for a beefed-up credit facility with rates locked in for not one but two years. Citigroup agreed to a 25 percent larger credit facility, but with a catch: For the next two years the bank wanted significantly more financial information about the firm. Instead of quarterly reports, Howrey now reports its finances to Citi every month. Partner comings and goings used to be reported annually; now it’s monthly. Citi bankers also started calling more often, especially to scope out the firm’s exposure to the fall’s bank failures and mergers.
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