Here's the scenario:

I have a small web design business and was using a branded backlink on the bottom of all client sites. Recently this has become a bit taboo with the Google updates so I went back to a few of my sites and made it so there's only a homepage backlink.

After doing this, I've had a drop in rankings, despite this apparently being a best practice. Is this likely a temporary drop that will pick back up?

For any new sites, I still want to have a link on all pages of client sites as it's good advertising. I plan to have a do-follow homepage link and then no-follow every other link - is this a good idea?