Howrey law firm shifts pay, development of entry-level attorneys
National News
When the Howrey law firm called its incoming associates into a conference room last June to announce it was breaking from industry custom and changing the role of its entry-level attorneys, there was a fair amount of apprehension. After all, the news came at a time when the economic downturn was forcing other firms to cut salaries or tell associates to delay their start.
But the law firm's move now seems prescient.
"Howrey was a first-mover, not a fast follower, here. And now we're going to see some other firms" doing the same, said William D. Henderson, an Indiana University law professor who studies law firm economics.
Instead of wooing first- and second-year attorneys with ever-higher salaries, Howrey set up a two-year program it called First Tier that offered new attorneys reduced salaries in exchange for more training. First Tier was the final step in a progression toward changing how associates advance at the firm.
In 2001, Howrey replaced its typical summer associate program with a "boot camp" for aspiring litigators. In 2007, it announced it would eliminate "lock-step compensation," in which attorneys are promoted en masse based on graduation year, and replace it with a merit-based system -- a move the firm completed at the beginning of 2009.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.