Never having been in a position to negotiate, I've been told by friends that once you have an offer, you can request details on the firm's status, like its debt structure, etc. I'm sure some firms won't tell you and some may ding your record for being so presumptuous. Also, while Dewey didn't embrace anything too unusual, Howrey's "apprentice" program should have been a massive red flag. A traditional firm deviating from the normal Biglaw model would be a redflag for me. Also, a firm that seems to lack a strategy, Reed Smith carpet bombing the country with offices to grow, SNR Denton trying a funky trans-atlantic merger, Dewey's office-opening spree would all concern me. Also, general firm health would concern me. Pepper Hamilton is known to be reliant on a couple of practice groups for the bulk of its profits and Fish & Richardson has had to extensively re-trench after a failed growth strategy.
I have heard from many people (at firms, in law school placement offices, in articles in NY Times) about the benefits of an apprentice model. I think it would be preferable as well. I think big firms aren't willing to do it for two reasons.
First, it would be an implicit admission that the people they're hiring may not be ready to do the work they are going to do for, and bill to, the clients. This could lower profitability for first year associates, at least in the short term, but that effect can be offset by a reduction in salary, ala Howrey.
Second, any firm to do this would be perceived as weaker than its peers. As long as no one breaks ranks, law firms can continue to do what they've always done (e.g. raise or not raise salaries together).
So it's not that the model is bad, it's just that there are pressures that work against its adoption. I will agree that it is more likely to be adopted by a firm that is struggling (to save on costs) or by a firm that may not have the same incentive to protect its reputation relative to its peers (i.e. it may get prestigious work, but not the MOST prestigious work).