Exodus of IP lawyers from Howrey brings the global disputes model under scrutiny

Does the global litigation law firm model work? This disturbing question has been explicitly raised this month by news of a 12-partner exodus from the European network of disputes and intellectual property (IP) specialist Howrey.

Indeed, departing partners from Howrey, who are heavily concentrated in the firm's Amsterdam and Brussels offices, have made much of the problems of working within a US-based firm. The argument goes that the US' generally stricter conflicts rules are a real hurdle for litigators operating in Europe, particularly when the bulk of the practice is weighted stateside, which makes it inevitable that American clients will get the upper hand in a close call on conflicts.

Though the split has led to strong feelings and conflicting claims on both sides, by common consent there is something to the conflict issue. And this goes double for IP litigation, where the dominance by a handful of players in the pharma and technology sectors means conflicts are an issue to be reckoned with.

Even leaving aside the focus of contentious IP, there is a growing feeling that the US' fragmented and restrictive conflicts rules will prove an increasing competitive disadvantage as US law firms assert themselves on the international stage – something for Hogan Lovells and SNR Denton to chew on.

But ultimately this appears to be less a question of whether the global litigation model works than whether it works for Howrey. After all, firms like Hogan Lovells, Baker & McKenzie and Bird & Bird have managed to establish themselves as credible cross-border forces in IP, and Allen & Overy has in recent years moved to expand its contentious practice in the area.

Yet Howrey, which has gone far further than most comparable large law firms in focusing on disputes and IP, has struggled in recent years to hit its stride. On paper, the clarity of the firm's antitrust, global litigation and IP strategy should make Howrey a poster boy for management consultants.

However, its profitability – which last year fell below the $1m (£628,700) partner average expected of top 100 US firms – lags rivals, there have been a number of senior departures, several strategic shifts and this year the firm engaged in a restructuring expected to have exited as much as 10% of its partnership.

And some would dispute the extent to which Howrey has really executed its own strategy. The departing partners, while including some very respected operators, are heavily focused on the Benelux market, a region that has lost traction in global IP in recent years. In this respect they were a questionable fit for a global firm – something which a firm of Howrey's pedigree should have considered when it built its European network in the first place.

On the plus side the firm has this year made some notable hires in London and last month secured the launch of a Duesseldorf office to support its Munich practice – but the firm must wish it had made more ground in key European markets by now. And the firm's London arm has also seen its fair share of upheaval in its senior ranks over the last three years, including the recent departure of high-profile patent litigator Richard Willoughby to boutique Rouse Legal.

While raising some valid questions about the challenges of building an international disputes-driven practice, the bottom line is Howrey is making heavy going of implementing its own game plan. At the level it is competing, it can't expect many more second chances.